INDIA GDP FORECAST: Fitch Ratings, a renowned credit rating agency, has recently revised its GDP forecast for India. The agency now projects a growth rate of 6.3% for the current fiscal year 2023-24, surpassing its previous estimate of 6%.

The upward revision in the GDP forecast is primarily due to a stronger performance in the first quarter and the overall positive momentum in the near term. Fitch Ratings took into account various factors contributing to the robustness of India's economy.

The projected growth rate of 6.3% for the fiscal year 2023-24 compares to a GDP expansion of 7.2% in the previous fiscal year (FY23). Notably, the Indian economy experienced a remarkable growth rate of 9.1% in the fiscal year FY22.

Fitch Ratings acknowledged the broad-based strength exhibited by India's economy, citing notable statistics such as a 6.1% year-on-year GDP growth in the first quarter of 2023 (January-March). The agency also highlighted the robustness of autosales, PMI surveys, and credit growth in recent months.

Previously, Fitch had lowered its forecast for the fiscal year 2023-24 to 6% from 6.2%. This adjustment was attributed to challenges arising from elevated inflation, interest rates, and subdued global demand. However, the improved economic conditions and favorable trends prompted Fitch to raise its forecast back to 6.3%.

Projections for Future Fiscal Years- Looking ahead, Fitch Ratings estimates a growth rate of 6.5% for both the fiscal years 2024-25 and 2025-26. These projections indicate the agency's confidence in the continued positive trajectory of India's economy.

Since the previous forecast, inflationary pressures have moderated, contributing to the overall positive outlook. Furthermore, the domestic economy has shown signs of improvement, reinforcing the upward momentum of India's GDP growth.

Factors Driving GDP Growth: Fitch Ratings attributes the growth in GDP during the January-March period to several key factors. Firstly, there has been a notable recovery in the manufacturing sector, which experienced two consecutive quarterly contractions prior to this improvement. Additionally, the construction industry has witnessed a significant boost, and there has been an increase in farm output.

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