Fitch slashes India's FY23 GDP growth forecast to 7% on slowing global economy, rising interest cost
New Delhi (PTI): Fitch Ratings on Thursday slashed India's GDP growth projection for FY23 to 7 per cent, saying the economy is expected to slow against the backdrop of global economy, elevated inflation and high interest rate.
In June, it had forecast 7.8 per cent growth for India.
“We expect the economy to slow, given the global economic backdrop, elevated inflation and tighter monetary policy. We now expect the economy to grow 7 per cent in the financial year to end-March 2023 (FY23) from 7.8 per cent previously, with FY24 also slowing to 6.7 per cent from 7.4 per cent before,” Fitch said in its September edition of the Global Economic Outlook.
As per official GDP estimates, the Indian economy expanded 13.5 per cent in June quarter, higher than 4.10 per cent growth clocked in January-March.
The RBI expects the economy to grow 7.2 per cent in current fiscal year.
The rating agency said, inflation moderated in August as crude oil prices eased but the risk to food inflation persists, given negative seasonality towards the end of this year.
The wholesale-price based inflation softened to an 11-month low of 12.41 per cent in August, even though retail inflation inched up to 7 per cent.
Fitch said that the RBI has already front-loaded its policy rate hikes, tightening by a total of 140 basis points since the start of 2022 to 5.4 per cent in August.
“We expect the RBI to continue raising, to 5.9 per cent, before year-end. The RBI remains focused on reducing inflation, but said that its decisions would continue to be calibrated, measured and nimble and dependent on the unfolding dynamics of inflation and economic activity. We therefore expect policy rates to peak in the near future and to remain at 6 per cent throughout next year,” Fitch said.
The US-based agency said that it expects the rupee value to remain at 79 against the US dollar by the end of 2022, while the retail inflation is expected to remain at around 6.2 per cent.
It said supply shocks and inflation are hitting the world economy hard and expects the world GDP to grow by 2.4 per cent in 2022, revised down by 0.5 percentage points.
In 2023, the world GDP will grow by just 1.7 per cent, 1 percentage points lower than previous estimates.
“The eurozone and UK are now expected to enter recession later this year and the US is expected to suffer a mild recession in mid-2023,” Fitch said.
Speaking on China, it said the recovery is constrained by the pandemic restrictions and a prolonged property slump, while projecting growth to slow to 2.8 per cent this year and recover to only 4.5 per cent next year.
“We've had something of a perfect storm for the global economy in recent months, with the gas crisis in Europe, a sharp acceleration in interest rate rises, and a deepening property slump in China,” said Brian Coulton, Chief Economist, Fitch Ratings.
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Air pollution in North India a 'national emergency', MPs must discuss ways to end crisis: Rahul
New Delhi (PTI): Asserting that air pollution in North India is a "national emergency", Leader of Opposition in the Lok Sabha Rahul Gandhi on Friday urged fellow MPs to come together in the upcoming Parliament session and discuss how the nation can end this crisis once and for all.
He said the air pollution crisis needs a collective national response, not political blame games.
Gandhi shared a video on X in which he is discussing the air pollution issue with environmentalist Vimlendu Jha at the India Gate here.
In his post along with the video, the Congress leader said air pollution in North India is a national emergency -- a public health crisis that is stealing our children’s future and suffocating the elderly, and an environmental and economic disaster that is ruining countless lives.
"The poorest among us suffer the most, unable to escape the toxic air that surrounds them. Families are gasping for clean air, children are falling sick and millions of lives are being cut short. Tourism is declining and our global reputation is crumbling," the former Congress chief said.
"The cloud of pollution covers hundreds of kilometres. Cleaning it up will need major changes and decisive action -- from governments, companies, experts and citizens. We need a collective national response, not political blame games," he added.
As Parliament meets in a few days, the MPs will all be reminded of the crisis by our irritated eyes and sore throats, he said.
"It is our responsibility to come together and discuss how India can end this crisis once and for all," Gandhi said.
In the video, the Congress leader asks the reasons for the air pollution crisis from Jha who responds by saying that it is a pan India problem and in NCR there are two sources -- episodic sources and perennial sources.
Jha highlights that stubble burning is an issue but only for three weeks and there is a need to provide the farmers with incentives.
The environmentalist, in conversation with Gandhi, calls for bringing about lifestyle changes to deal with the air pollution crisis.
The Winter Session of Parliament begins on November 25 and will continue till December 20.
