S&P Retains India’s Growth Projection at 6% for FY24; Fastest Growing Economy in Asia Pacific

S&P Global Ratings, a renowned credit rating firm, has kept India’s GDP growth forecast at 6% for fiscal year 2023-2024. This forecast positions India as the fastest growing economy among the Asia Pacific nations. The rating agency’s decision to maintain the growth outlook is based on the country’s domestic resilience.

India, Vietnam, and the Philippines Lead the Growth Chart

According to S&P Global Ratings’ quarterly economic update for the Asia-Pacific region, India, Vietnam, and the Philippines are expected to experience the highest growth rates, each projected at around six percent. These countries’ medium-term growth prospects remain positive. According to S&P, Asian emerging market economies will continue to be among the fastest expanding in the global growth forecast through 2026.

Inflation Expected to Soften; Interest Rate Cut Delayed

S&P Global Ratings predicts that retail inflation in India will likely ease to five percent in the fiscal year 2023-2024, down from 6.7 percent in the previous year. Fuel and core inflation are expected to fall as a result of lower oil costs and a slowing in demand, respectively. However, according to S&P, the Reserve Bank of India (RBI) would delay interest rate decreases until early 2024. The RBI expects consumer inflation to rise to the four percent target range.

China’s Growth Forecast Lowered; Resilience Seen in Rest of the Region

S&P Global Ratings has revised down China’s growth forecast for 2023 to 5.2 percent from the previous estimate of 5.5 percent. However, the agency has left the growth projections for the rest of the region broadly unchanged, citing domestic resilience as a contributing factor.