S&P Global Ratings has projected India’s economic growth at 7.3 per cent in the current fiscal with downside risks. The Ratings Agency has also said that inflation is likely to remain above RBI’s upper tolerance threshold of 6 per cent till the end of 2022.
In its Economic Outlook for Asia Pacific, S&P said India’s growth next year will get support from domestic demand recovery after the coronavirus pandemic.
“We have retained our India growth outlook at 7.3 per cent for the fiscal year 2022-2023 and 6.5 per cent for the next fiscal year, although we see the risks tilted to the downside,” it said.
As per the ratings agency, elevated core inflation would drive up policy rates further in India. It has projected policy interest rates to be 5.9% by the end of this fiscal.
The Reserve Bank of India expects India to grow at 7.2% this current fiscal. Ratings Agency Fitch Ratings had, however, slashed growth estimates from the earlier 7.8% to 7%. The Asian Development Bank had also cut its projection from 7.5% to 7% earlier, while the Indian credit agency, India Ratings and Research had reduced it further from 7% to 6.9%.