Fitch Ratings Forecasts India’s GDP Growth at 6.9% in FY23-24, To Be Among Fastest-Growing Nations

New Delhi, Dec 23 (KNN) Fitch Ratings projects India to emerge as one of the fastest-growing nations globally, anticipating a resilient Gross Domestic Product (GDP) growth of 6.9 per cent for the fiscal year 2023-24.

The rating agency further envisions India's economy sustaining momentum at 6.5 per cent in 2024-25.

In its report, Fitch Ratings highlights the persistent strong demand for key sectors such as cement, electricity, and petroleum products, with high-frequency data in 2023 consistently surpassing pre-Covid-19 pandemic levels.

The surge in infrastructure spending is identified as a catalyst for increased steel demand, while expectations of moderated car sales growth in 2023 do not dampen the positive outlook.

India, presently the world's fifth-largest economy, is anticipated to surpass Japan by 2030, becoming the second-largest economy in the Asia-Pacific region.

Despite challenges from slowing growth in overseas markets, the rating agency emphasises that India's robust economic growth will drive demand for corporations.

Easing input cost pressures are expected to boost profits, providing companies with ample rating headroom, despite increased capital expenditure.

While addressing India's IT sector, a significant contributor to GDP, the rating agency acknowledges potential moderation in sales growth for IT services due to slowing demand in the US and the eurozone.

However, the agency anticipates improved profitability supported by a corresponding easing of employee attrition and wage pressures.

Fitch Ratings remains optimistic about maintaining industry balance in the cement and steel sectors, even with accelerated new capacity additions.

The rating agency underscores its belief in India's structural demand visibility, ongoing supply-side reforms by the government, and healthier corporate and bank balance sheets, paving the way for increased capital expenditure across various sectors following an uptick in FY23.

(KNN Bureau)