<p class="title">Rating agency Fitch on Friday upgraded India's economic growth forecast for financial year 2018-19 to 7.8% from its earlier estimates of 7.4% but said rising oil bills and weak balance sheet of banks could pose headwinds.</p>.<p class="bodytext">"We have revised up our forecast for FY19 growth to 7.8% from 7.4% on the back of the better-than-expected performance during second quarter of FY18. India's growth likely peaked in April-June quarter of FY2018 though," the rating agency said in its Global Economic Outlook.</p>.<p class="bodytext">The rating upgrade came a little after India's economy grew 8.2% in the April-June quarter. Fitch also expressed hope that India's fiscal policy will be growth oriented in the run-up to elections.</p>.<p class="bodytext">"Fiscal policy should remain quite supportive of growth in the run up to elections likely to be held in early 2019. The investment/GDP ratio has stopped trending down, helped by ramped up public infrastructure outlays, in particular by state-owned enterprises," it said.</p>.<p class="bodytext">Finance Minister Arun Jaitley has reiterated his commitment to keep the fiscal deficit at 3.3% of the GDP in 2018-19 and maintain a 100% capital expenditure without any cut despite the year being an election year.</p>.<p class="bodytext">Although inflation is largely under control at the moment, the rating agency forecast a pick up in price rise situation on the back of rupee deterioration and demand-pull pressures.</p>.<p class="bodytext">Fitch, however, cut the growth forecasts for 2019-2020 and 2020-2021 by 0.2 percentage points to 7.3%.</p>.<p class="bodytext">Fitch is the first among rating agencies to upgrade India's growth forecast this year. Moody's had earlier estimated the economic growth to be 7.4% in 2018-19 which was a percentage point higher than earlier projection of Fitch.</p>.<p class="bodytext">Though IMF, in its latest projections in July, cut India's growth forecast for 2019 by 0.3% points than its April estimates, it still held it at 7.5%. The global lender too cited high oil prices and greater than monetary tightening due to rising inflation as risk to growth.</p>.<p class="bodytext">According to World Bank's latest estimates India is expected to grow at 7.5% in the current year. ADB has put it at 7.6%.</p>.<p class="bodytext">The RBI, however, has projected the country to grow at 7.4% and the government believes the economy will accelerate at 7.5%.</p>
<p class="title">Rating agency Fitch on Friday upgraded India's economic growth forecast for financial year 2018-19 to 7.8% from its earlier estimates of 7.4% but said rising oil bills and weak balance sheet of banks could pose headwinds.</p>.<p class="bodytext">"We have revised up our forecast for FY19 growth to 7.8% from 7.4% on the back of the better-than-expected performance during second quarter of FY18. India's growth likely peaked in April-June quarter of FY2018 though," the rating agency said in its Global Economic Outlook.</p>.<p class="bodytext">The rating upgrade came a little after India's economy grew 8.2% in the April-June quarter. Fitch also expressed hope that India's fiscal policy will be growth oriented in the run-up to elections.</p>.<p class="bodytext">"Fiscal policy should remain quite supportive of growth in the run up to elections likely to be held in early 2019. The investment/GDP ratio has stopped trending down, helped by ramped up public infrastructure outlays, in particular by state-owned enterprises," it said.</p>.<p class="bodytext">Finance Minister Arun Jaitley has reiterated his commitment to keep the fiscal deficit at 3.3% of the GDP in 2018-19 and maintain a 100% capital expenditure without any cut despite the year being an election year.</p>.<p class="bodytext">Although inflation is largely under control at the moment, the rating agency forecast a pick up in price rise situation on the back of rupee deterioration and demand-pull pressures.</p>.<p class="bodytext">Fitch, however, cut the growth forecasts for 2019-2020 and 2020-2021 by 0.2 percentage points to 7.3%.</p>.<p class="bodytext">Fitch is the first among rating agencies to upgrade India's growth forecast this year. Moody's had earlier estimated the economic growth to be 7.4% in 2018-19 which was a percentage point higher than earlier projection of Fitch.</p>.<p class="bodytext">Though IMF, in its latest projections in July, cut India's growth forecast for 2019 by 0.3% points than its April estimates, it still held it at 7.5%. The global lender too cited high oil prices and greater than monetary tightening due to rising inflation as risk to growth.</p>.<p class="bodytext">According to World Bank's latest estimates India is expected to grow at 7.5% in the current year. ADB has put it at 7.6%.</p>.<p class="bodytext">The RBI, however, has projected the country to grow at 7.4% and the government believes the economy will accelerate at 7.5%.</p>
