S&P Global Ratings, a leading credit rating agency, has retained India’s GDP growth projection at six percent for the fiscal year 2023-2024. This forecast positions India as the fastest growing economy among the Asia Pacific nations. The rating agency’s decision to maintain the growth outlook is based on the country’s domestic resilience.
India, Vietnam, and the Philippines Lead the Growth Chart
According to S&P Global Ratings’ quarterly economic update for the Asia-Pacific region, India, Vietnam, and the Philippines are expected to experience the highest growth rates, each projected at around six percent. The medium-term growth outlook for these countries remains solid. S&P emphasizes that Asian emerging market economies continue to be among the fastest growing in the global growth outlook through 2026.
Inflation Expected to Soften; Interest Rate Cut Delayed
S&P Global Ratings predicts that retail inflation in India will likely ease to five percent in the fiscal year 2023-2024, down from 6.7 percent in the previous year. The agency expects a decline in fuel and core inflation due to softer crude prices and a moderation in demand, respectively. However, S&P suggests that the Reserve Bank of India (RBI) will postpone interest rate cuts until early 2024. The RBI aims to observe consumer inflation moving towards its target range of four percent.
China’s Growth Forecast Lowered; Resilience Seen in Rest of the Region
S&P Global Ratings has revised down China’s growth forecast for 2023 to 5.2 percent from the previous estimate of 5.5 percent. However, the agency has left the growth projections for the rest of the region broadly unchanged, citing domestic resilience as a contributing factor.