Rating agency Fitch Ratings has slashed India's economic growth forecast to 8.4 per cent for the current fiscal year while raising the country’s GDP growth forecast for the next financial year to 10.3 per cent. It had earlier forecasted a GDP growth of 8.7 per cent for the current financial year and 10 per cent in the FY 2023.
"We have cut our FY22 (financial year ending March 2022) GDP growth forecast to 8.4 per cent (-0.3 pp). GDP growth momentum should peak in FY23, at 10.3 per cent (+0.2 pp), boosted by a consumer-led recovery and the easing of supply disruptions," Fitch said in its Global Economic Outlook
The older forecast had come on the back of an observed "resilience in the Indian economy" facilitated by a swift cyclical recovery after the lethal second wave of Covid-19 in the second quarter of this financial year.
In a separate development on Wednesday, the Reserve Bank Of India retained its GDP growth forecast for the current financial year at 9.5 per cent. Additionally, it reaffirmed its projections for the third quarter at 6.6 per cent and 6.0 per cent in the fourth quarter of the current financial year.
Real GDP growth is estimated to be 17.2 per cent in the first quarter of the next financial year and 7.8 per cent in the second quarter.
"...notwithstanding some recent corrections, headwinds continue to be posed by elevated international energy and commodity prices, potential volatility in global financial markets due to a faster normalisation of monetary policy in advanced economies, and prolonged global supply bottlenecks," RBI Governor Shaktikanta Das stated on Wednesday while reading the Monetary Policy Statement.