S&P Global raises FY24 GDP growth, cuts FY25 estimate

Robust domestic momentum has offset headwinds from high food inflation and weak exports

- Pranati Deva

S &P Global Ratings said India’s economy in FY24 will grow at a faster clip than it previously projected before hitting a slower-than-estimated trajectory in the next financial year. The rating agency revised the Gross Domestic Product (GDP) growth projection for financial year 2024 to 6.4% from 6% earlier on the back of strong domestic tailwinds.

“We have revised up our projection for India’s GDP growth for fiscal 2024 (ending in March 2024) to 6.4%, from 6%, as robust domestic momentum seems to have offset headwinds from high food inflation and weak exports," it said in a note.

However, it lowered the growth projection for financial year 2025 to 6.4% from 6.9% earlier.

This reduction comes on the back of expectations of growth slowing in the second half of the year amid subdued global growth, a higher base and a lagged impact of interest rate hikes effected by the Reserve Bank of India.

S&P’s FY25 GDP growth prediction is lower than the RBI’s projection of 6.6%.