Fitch retains India growth forecast at 7% for this fiscal, cuts projections for next 2 years

Fitch Ratings on Tuesday retained India's economic growth forecast at 7 per cent for the current fiscal, saying India could be one of the fastest-growing emerging markets this year. It, however, cut the projections for the next two financial years, stating that even though the country is shielded to some extent from global economic shocks but is not impervious to global developments.

In its December edition of the Global Economic Outlook, Fitch projected India's GDP to grow at 7 per cent in the current fiscal and slow to 6.2 per cent in 2023-24 and 6.9 per cent in 2024-25.

In September, Fitch had projected 7 per cent growth for the current fiscal, followed by 6.7 per cent in 2023-24 and 7.1 per cent growth in 2024-25.

Given the stronger-than-expected outturn, Fitch forecasts growth at 7 per cent in the financial year ending March 2023 (FY23).

"India is expected to record one of the fastest growth rates among emerging markets in our Fitch20 coverage this year," it said.

India is shielded to some extent from global economic shocks given the domestically focused nature of its economy, with consumption and investment making up the bulk of the country's GDP.

"However, India is not impervious to global developments. The worldwide economic slowdown is expected to reduce demand for Indian exports," Fitch said.