American credit rating agency Fitch has revised the GDP growth estimate of India to 12.8% for the next fiscal. Earlier, the estimate was 11%.
Key Points
- This revision in India’s GDP growth estimate has been done by the agency on the back of a stronger carryover effect, a looser fiscal stance, and better virus containment.
- In the latest Global Economic Outlook (GEO), Fitch anticipates the level of India’s GDP to remain well below its pre-pandemic forecast trajectory.
- The rating agency also expects that the GDP growth will ease to 5.8% in the Financial Year 2023.
- As per the report, the country’s recovery from the depths of the lockdown-induced recession in the second quarter of 2020 has been faster than expected.
- GDP surpassed its pre-pandemic level in the Q4 of the current fiscal.
- Also, High-frequency indicators point to a strong start to the year 2021 for India.
- The manufacturing Purchasing Managers’ Index PMI has remained elevated in February, while the pickup in mobility and a rise in the services PMI point to further gains in the services sector.
- Fitch notes that it does not expect the Reserve Bank of India (RBI) to cut its policy rate, looking at the brighter short-term growth outlook and a more limited decrease in inflation than it had forecast.
Fitch Rating Agency
Fitch is one of the three big credit rating agencies. The other two are Standard & Poor’s and Moody’s. It was founded in the year 1914 and is headquartered in New York, US.
