S&P revises inflation projection for India

Earlier this week, S&P maintained its economic growth forecast for India at 6% for the fiscal year 2024

September 28, 2023

S&P is expecting India to reach 5.5%

S&P maintained its economic growth forecast for India at 6% for the fiscal year 2024, with growth anticipated at 6.9% for the following two years

India appears on track to achieve near-term growth of 7%, driven by resilient consumer activity and expectations of improved external condition

Ongoing free trade negotiations and supply chain diversification are positive factors for India's competitiveness in various sectors

Rating agency S&P has revised its inflation projection for India in 2024, now expecting it to reach 5.5%, a half percentage point higher than their previous estimate.

Earlier this week, S&P maintained its economic growth forecast for India at 6% for the fiscal year 2024, with growth anticipated at 6.9% for the following two years.

Experts emphasised that the risks were well-balanced, particularly regarding economic growth. The growth might surpass expectations due to the nation’s robust domestic economy. 

Although India appears on track to achieve near-term growth of 7%, driven by resilient consumer activity and expectations of improved external conditions in the coming years, achieving growth beyond 7% remains a challenge for the time being.

To sustain long-term growth, experts identified policy continuity, increased labour force participation, and access to global markets as crucial priorities.

They also noted ongoing free trade negotiations and supply chain diversification as positive factors for India’s competitiveness in various sectors, emphasising the need to continue these efforts.

Experts anticipate a drop in inflation to below 6% in September, driven by lower tomato prices and reduced cooking gas cylinder costs.

Source: Economic Times

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