India’s growth forecast for the current fiscal year has been retained at 6% by S&P Global Ratings due to a global economic slowdown, the delayed effect of rate hikes and the mounting risk of “subnormal monsoons.”

S&P Global forecasts the recent surge in vegetable price inflation will be temporary but has upwardly revised the full fiscal retail inflation forecast to 5.5%, from a previous 5% prediction, due to higher global oil prices.

“Growth this year will be weaker than in 2022, but our outlook remains broadly favourable. Notwithstanding the strong expansion in India in the June quarter, we maintain our forecast for fiscal 2024 (ending March 2024), given the slowing world economy, the delayed effect of rate hikes, and the rising risk of subnormal monsoons,” according to S&P’s Economic Outlook for Asia Pacific Q4 2023 report.

India’s economy grew 7.2% in the 2022/23 fiscal year, which came to an end in March 2023.

Whilst maintaining its growth prediction for the current financial year at 6%, S&P Global also retained its forecast that India’s economy will grow 6.9% in both the 2024/25 and 2025/26 fiscal years.

In addition, the US-based agency stated that India’s consumption growth and capital expenditure remained “strong” throughout the June quarter.

Furthermore, in regard to growth within the Asia Pacific region, S&P went on to say it remains a “multi-speed region” and marginally raised its forecast for this year to 3.9% amid domestic resilience.

“In all, growth in the region has generally remained resilient. Year-on-year GDP growth picked up in the second quarter in both developed and emerging Asian economies. India led again, with GDP growing 4.2% quarter on quarter to a level 7.8% up on a year ago,” S&P continued.