The Indian economy is expected to grow by 6 per cent in the financial year 2023-24, sharply down from the projected growth of 7 per cent in the current fiscal, S&P Global said on Monday.
In its quarterly economic update for Asia-Pacific, S&P Global Ratings pegged India’s economic growth for the financial years 2024-25 and 2025-26 at 6.9 per cent. The country's GDP growth is likely to accelerate marginally to 7.1 per cent in 2026-27.
The economic growth projection for fiscal 2023-24 is the same as announced by the credit rating agency in its previous report.
Also Read | No direction on loading Rs 2,000 notes in ATMs, says FM Sitharaman
India will remain among the fastest growing economies in the world. The average economic growth is pegged at 7 per cent during the period 2024-2026.
Inflationary pressure is expected to ease. The headline retail inflation is expected to decline to 5 per cent in 2023-24 from 6.8 per cent in the current financial year.
“In our view, India's Consumer Price Index (CPI) inflation should moderate to 5 per cent in fiscal year 2024 (2023-24) but we also anticipate upside risks, including from weather-related factors,” S&P Global said in the report.
The rating agency noted in its report that the Reserve Bank of India (RBI) is likely to hike policy interest rates further due to the recent upside surprise to inflation.
The Monetary Policy Committee of the RBI is slated to meet in the first week of April to decide on the policy interest rate.