S&P Global raises India's FY25 GDP growth forecast by 40 bps to 6.8%
- IBEF
- March 27, 2024
S&P Global revised India's GDP growth forecast for FY25 to 6.8%, below the RBI and government's projections of 7%. S&P Global anticipates India's GDP to expand by 7.6% in FY24, with predictions for FY26 and FY27 remaining at 7%. According to S&P's Asia-Pacific chief economist, Mr. Louis Kuijs, India, Indonesia, the Philippines, and Vietnam are expected to lead in robust growth among Asian emerging market economies. S&P noted that high interest rates and inflation have dampened household spending in India, Japan, and Australia, impacting sequential GDP growth in the latter half of FY24. However, they anticipate rate cuts of up to 75 basis points in India in 2024, driven by slowing inflation, a smaller fiscal deficit, and lower US policy rates.
Despite these factors, the timing of rate cuts may be delayed until mid-2024 or later, pending further clarity on disinflation trends. S&P forecasts a slowdown in China's GDP growth to 4.6% in FY25 due to property market weakness and modest macro-policy support, with deflation posing a risk if consumption remains subdued. Additionally, S&P expects growth to increase in trade-dependent economies like South Korea, Taiwan, and Singapore, while declining in relatively domestic demand-led economies such as Japan and Australia within the Asia-Pacific region.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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