India’s economy could reach an annual average growth rate of 6.2% in the medium term during 2019-2027, according to the latest Global Economic Outlook report by Fitch Ratings on Monday.

Fitch increased the forecast by 0.7 percentage points from 5.7% estimated for 2013-2022, predominantly due to an improvement in the employment rate and a better working-age population forecast.

“India’s labour productivity forecast is also higher,” according to the report.

That said, this latest forecast comes amid a downward revision of the medium-term growth potential for 10 emerging economies by Fitch, from 4.3% to 4%, mainly fuelled by a reduction in China’s growth outlook, Business Standard reports.

“We have lowered China’s supply-side growth potential to 4.6% from 5.3%. China’s growth has slowed sharply in recent years, and prospects for capital deepening have deteriorated as the property slump weighs heavily on the investment outlook. The labour supply outlook is also weakening, reflecting demographics and falls in the labour force participation rate,” the report stated.

The 10 emerging economies included in the findings are Brazil, China, India, Indonesia, Korea, Mexico, Poland, Russia, South Africa, and Turkey.

“The 2020 pandemic-caused recession was severe in some emerging economies, with very large GDP declines in Mexico, South Africa, and India but only a mild contraction in Korea and moderately positive growth in Turkey and China. The subsequent economic recovery was strong in most economies as governments increased fiscal spending, global trade recovered, and private consumption rebounded following the re-opening of economic activity,” the report adds.

India is among the countries with the largest downward revisions to labour inputs compared to 2019, according to Fitch Ratings.

“India’s projected labour supply growth is also lower relative to 2019, given the expected negative growth in the participation rate. While the participation rate has recovered from its pandemic slump, it remains significantly below levels recorded in the early 2000s, partly as the employment rate among women remains very low,” says the report.