S&P, OECD retain India’s economic growth projections for FY23

The S&P Global Rating Monday retained India’s current fiscal FY23 economic growth estimates at 7.3 per cent but said inflation might remain above the RBI’s upper tolerance level of 6 per cent.

Economic grouping OECD too retained the GDP growth projections at 6.9 per cent for the current financial year.

The projections come close on the heels of RBI’s monetary policy on September 30 during which it is almost certain to tighten money supply to tame rising inflation.

“We have retained our India growth outlook at 7.3 per cent for the fiscal year 2022-23 and 6.5 per cent for the next fiscal year, although we see the risks tilted to the downside,” the rating agency said in its economic outlook.

S&P’s economic growth projection are now close to that of RBI’s 7.2 per cent for the current fiscal year (2022-23).

On inflation, it said the average rate in the current fiscal could be 6.8 per cent and could fall to 5 per cent in fiscal year 2023-24 beginning April 2023.

“India’s headline consumer price inflation is likely to remain outside the Reserve Bank of India’s upper tolerance limit of 6 per cent until the end of 2022. That’s amid substantial weather-induced wheat and rice price increases as well as sticky core inflation. And food inflation may rise again,” S&P said.

The OECD’s interim economic outlook held softer external demand as a factor in India’s projected slowdown from 8.7 per cent in the financial year 2021-22 to around 7 per cent in 2022-23.

The OECD also retained the inflation projection for India at 6.7 per cent. It was the same in its June economic outlook report.