S&P pegs India's growth outlook at 7.3 per cent

S&P Global Ratings believes that India's economic growth will be 7.3 per cent for the current fiscal and 6.5 per cent for the next fiscal. S&P said India's growth will be supported by domestic demand recovery after the COVID-19 epidemic. The risks are tilted towards the downside, but we have retained our India growth outlook at 7.3 per cent for fiscal 2022 -- 23 and 6.5 per cent for the next fiscal year. The ratings agency said that the inflation is likely to remain above the Reserve Bank of India's upper threshold of 6 per cent till 2022 - end. The agency stated that elevated core inflation would increase policy rates in India and projected policy rates to 5.90 per cent by the end of the fiscal.

S&P Global Ratings said that India's headline consumer price inflation SPI is likely to stay outside the Reserve Bank of India's upper tolerance limit of 6 per cent until the end of 2022, despite India's inflation numbers. That is due to substantial weather-induced wheat and rice price increases as well as sticky core inflation. International institutions like the International Monetary Fund IMF and rating agencies like Goldman Sachs, Morgan Stanley and Asian Development Bank ADB cut India's GDP growth projection. The International Monetary Fund International Monetary Fund IMF reduced its GDP forecast from 8.2 per cent to 7.4 per cent.

In India's GDP growth forecast for full-year 2022 was cut by Goldman Sachs from 7.6 per cent to 7 per cent. Asian Development Bank ADB slashed India's growth projections by 50 basis points from 7.5 per cent to 7 per cent earlier in the day. Morgan Stanley also capped India's GDP growth to 7.2 per cent in the current fiscal.