India is APAC's fastest-growing Economy, according to S&P
India’s GDP growth
prediction was maintained at 6% by S&P Global Ratings, who also noted that
India has the greatest economic growth in the Asia-Pacific region. S&P
Global Ratings projected the same growth for Vietnam and the Philippines along
with India in its quarter economy update for the Asia-Pacific region released
on Monday.
S&P has maintained
its previous projections for India’s GDP growth in both the current fiscal year
and the following fiscal year, FY25, in part due to the country’s domestic
flexibility.
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The growth forecast for
the next few years is positive. S&P Global’s Asia-Pacific head economist
Louis Kuijs was quoted by PTI as saying that the region’s emerging markets
would continue to be among the world’s fastest expanding through 2026.
The Reserve Bank of
India (RBI) also reduced its inflation prediction for FY24 in the most recent
Monetary Policy Meet (MPC), which ended on June 8. The RBI’s April policy
lowered the inflation target from 5.2 percent to 5.1 percent.
The decision was made
in spite of recent drops in inflation performances but the result is expected
to remain over the 4% target for this fiscal year as food and commodities
prices face upside risks from probable supply cuts.
We think the inflation
and rate increase cycles have reached their peak. However, when consumer
inflation moves closer to 4%, the middle of the Reserve Bank of India’s goal
range, we anticipate a rate drop by early 2024, as stated by Kuijs.
In addition, India’s
chief economic adviser (CEA) V Anantha Nageswaran predicted earlier this month
that the country’s GDP will expand by 6.5% annually for the remainder of the
decade, with an occasional annual expansion of 7%.
He predicted that this
fiscal year would see increased investment in the country’s infrastructure,
leading to growth in India of half a percentage point to a full percentage
point over what was predicted by rating agencies.
The World Bank
anticipated that amid a decrease in growth, India would still be the
fastest-growing major economy in regard to aggregate and per capita GDP because
of “being resilient in private investment and consumption, and strong
growth in the services industry in India.”
The World Bank had
previously stated that India would improve the growth prospects of the South
Asian area, predicting a growth rate of 6.3%, 6.4%, and 6.5% for India in FY24,
FY25, and FY26, respectively.
The projected growth
prediction for China, however, has been reduced by S&P from 5.5 percent to
5.2 percent for the year 2023.
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