By earn 
Morning Alert..
Fitch Ratings raises India’s growth forecast by 20 bps to 7.2% for FY25
Fitch Ratings on Tuesday raised its growth estimates for India by 20 basis points to 7.2 per cent — same as that of the Reserve Bank of India (RBI) — citing positive economic outlook driven by recovering consumer confidence and increased investment. “Investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence. Purchasing managers survey data point to continued growth at the start of the current financial year. Signs of the coming monsoon season being more normal should support growth and make inflation less volatile, though the recent heatwave poses a risk,” the rating agency said in its latest Global Economic Outlook (GEO). The Indian economy grew at an impressive rate of 8.2 per cent in FY24, driven by a stronger-than-expected expansion of 7.8 per cent in the fourth quarter. Fitch said growth in later years may slow and approach its medium-term trend estimate. “We forecast real GDP growth of 6.5 per cent in FY25/26 (unchanged from March), and 6.2 per cent in FY26/27, driven by consumer spending and investment,” it added.
Rural demand picking up, likely to hold this year: RBI Governor Das
Reserve Bank of India Governor Shaktikanta Das on Tuesday said gross domestic product (GDP) growth for the first quarter of 2024-25 was projected to be 7.3 per cent, expressing confidence in continued economic momentum driven by rural demand revival, government expenditure, and services exports. At the same time, Das said that while inflation had been decreasing, the last mile of disinflation could be challenging due to volatile food prices. He said a change in policy stance at this point could be premature. According to Das, the current account deficit (CAD) for FY24 could be lower than 1 per cent. “We see a very strong momentum of economic activities,” Das said at an ET Now event. “And that same strong momentum of economic activity has also continued into the first quarter of this year. We are therefore optimistic that the projection for the first quarter of this year will indeed be 7.3 per cent, and there is no reason why the momentum will slow down,” he said.
