Fitch raises India's FY25 GDP forecast to 7 % from 6.5% earlier, sees 50 bps rate cut from RBI

Rating agency Fitch on Thursday revised India's FY25 growth forecast upward to 7% from the 6.5% projected earlier. The rating agency also expects the RBI to go for a 50 bps rate cut from July to September, adding that it sees the country's CPI declining by 4% by end of 2024.

Revising its forecast, Fitch said the prospects for EM except China have brightened, particularly in India. It now expects growth to reach 7.8% in the fiscal year ending March 2024 and 7% IN fy 2024-25.

With GDP growth having exceeded 8% for three straight quarters, the agency said it expects an easing in the growth momentum in the final quarter of the current fiscal year, implying an estimate of 7.8% growth in FY23-24.

The development comes amid calls of upgrade after India's recent estimate-beating 8.4% growth in the third quarter.

"Overall, the economy ticks many boxes in the right way...so there is a case for international agencies to reappraise their estimate of potential GDP growth in India closer to 7 percent, if not above," Chief economic advisor V Anantha Nageswaran had said.

This is a developing story