S&P retained its growth forecast for the current financial year at 6.80 per cent

Mumbai: S&P Global Ratings has maintained its forecast for India's economic growth at 6.80 per cent for the current financial year. The agency also expressed concern that high interest rates and low fiscal stimulus will reduce demand. On the other hand, China's GDP forecast for 2024 has been raised.

India's economy will continue to surprise with an economic growth rate of 8.20 per cent in fiscal year 2023-24, the agency said in its Economic Outlook for Asia Pacific.

We expect growth to slow to 6.80 per cent in the current fiscal year. High interest rates and low fiscal stimulus will impact demand in the non-agricultural sector.

S&P estimates the growth rate for financial years 2025-26 and 2026-27 to be 6.90 per cent and 7 per cent, respectively.

S&P's estimate is lower than the Reserve Bank of India's (RBI) estimate of 7.20 percent. In view of the increase in rural demand and softening of inflation, the Reserve Bank had estimated the country's economic growth rate to be 7.20 percent at the beginning of the current year.

For China, S&P raised its GDP forecast for 2024 to 4.80 percent from 4.60 percent.