Explore Business Standard
Don’t miss the latest developments in business and finance.
S&P Global Ratings on Monday kept its forecast for India's economic growth unchanged at 6 per cent in the fiscal year starting April 1, before rising to 6.9 per cent in the following year. In the quarterly economic update for Asia-Pacific, S&P saw inflation rate easing to 5 per cent in 2023-24 fiscal, from 6.8 per cent in the current financial year. It saw India's gross domestic product (GDP) likely growing by 7 per cent in the current financial year ending March 31 (2022-23), before slowing to 6 per cent in the next 2023-24 fiscal. "India leads, with average growth of 7 per cent in 2024-2026," the update said. GDP is projected to rise to 6.9 per cent in the following two financial years -- 2024-25 and 2025-26 and rising to 7.1 per cent in 2026-27. "In India, domestic demand has traditionally led the economy. But it has become more sensitive to the global cycle lately, in part due to rising commodity exports; and its year-on-year GDP growth slowed to 4.4 per cent in the fourth
S&P Global Ratings on Tuesday said core inflation in India has been declining sequentially, and an elevated 6.25 per cent policy rate limits the need for further rate hikes. The Reserve Bank has increased the short-term lending rate by 225 basis points since May last year to contain inflation, mostly driven by external factors, especially global supply chain disruption, following the Russia-Ukraine war outbreak. The policy rate now stands at 6.25 per cent. The RBI's rate-setting panel - Monetary Policy Committee (MPC) - will decide on the interest rate on Wednesday. "In India, core inflation has been elevated for longer; however, it eased sequentially in the second half of 2022. An already elevated 6.25 per cent policy rate limits the need for further increases," S&P said in a report. The RBI has been tasked to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent. However, external factors have led retail inflation to remain above the upper tolerance .