India's Economic Surge: Fitch Boosts FY25 GDP Forecast to 7%

Fitch's Upward Revision:

Fitch Ratings, a leading global ratings agency, has revised India's GDP growth forecast for the fiscal year 2025 upwards to 7% from its earlier projection of 6.5%. This revision reflects Fitch's optimism about India's economic expansion in the upcoming fiscal year.

Expectations for Monetary Policy:

Fitch anticipates a 50 basis points (bps) rate cut by the Reserve Bank of India (RBI) between July and December. The RBI has maintained the repo rate at 6.5% for the past six consecutive meetings, emphasizing its commitment to achieving a sustainable 4% inflation target by the end of 2024.

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Drivers of Growth:

Fitch highlights domestic demand, particularly investment, as the primary driver of India's economic growth. It underscores sustained levels of business and consumer confidence contributing to this positive outlook.

Comparative Analysis:

In contrast to India's revised forecast, Fitch has slightly trimmed China's GDP growth forecast for 2024 to 4.5% from 4.6%. This adjustment reflects concerns about the property sector and emerging deflationary pressures. However, China's fiscal support measures have cushioned the impact on its economic outlook.

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Moody's Assessment:

In a recent development, Moody's raised its GDP growth estimate for India in 2024 to 6.8% from 6.1%, indicating a favorable perception of India's economic trajectory.

Recent Economic Performance:

India's economy exhibited strong growth, surpassing expectations by expanding at a rate of 8.4% in the final quarter of 2023, the fastest pace in one-and-half years. This strong performance underscores Prime Minister Narendra Modi's track record of delivering impressive growth rates ahead of general elections.


Fitch's upward revision of India's GDP growth forecast for fiscal year 2025 to 7% reflects optimism about the country's economic prospects. The projected expansion is driven by domestic demand, with monetary policy expected to provide further support. However, ongoing vigilance is necessary to navigate global economic dynamics and sustain growth momentum.

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