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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India's neighbours wanted to break up Assam but Modi govt shattered their dreams: Fadnavis
Dibrugarh/Jorhat (PTI): Maharashtra Chief Minister Devendra Fadnavis on Tuesday claimed India's neighbours wanted to "break up" Assam by taking advantage of the unrest here earlier, but their "dreams were shattered" as the Narendra Modi government brought peace to the region.
Militancy has come to an end, and 92 per cent of the assurances made in the peace agreements with various groups have already been implemented, he told a poll rally.
Fadnavis maintained that the BJP-led government in Assam has not only ensured the state's development but also protected its identity.
He accused the Congress of having neglected the state and the northeastern region by adopting a "step-motherly attitude" towards them, while Modi has put the region at the centre of development.
Addressing a rally in support of BJP's Dibrugarh candidate Prasanta Phukan, Fadnavis said, "Due to the unrest in the state earlier, neighbouring countries thought they would break Assam someday. But their dreams were shattered by Modi ji, and Assam is progressing fast today."
Crediting the BJP government for bringing the militant groups to the mainstream, the Maharashtra chief minister said not only were peace accords signed with them, but 92 per cent of the assurances made have been implemented.
"Work is on for implementing the remaining eight per cent of promises also," he added.
Highlighting the various welfare measures of the state government, Fadnavis said special emphasis was being given on women's empowerment in line with the Centre's thrust on it.
"Women have benefited the most under Modiji's government. It will be 'Mahila raaj' from 2029 when 33 per cent reservation is implemented in Parliament and state Assemblies," he added.
Speaking at another rally in support of the BJP's Jorhat candidate Hitendra Nath Goswami earlier, the Maharashtra chief minister alleged that infiltration was at its peak in Assam under Congress governments.
"People had to launch a movement against it, and scores were martyred. But the influx did not stop, and the state was burning. It was staring at a full demographic change."
"But the situation changed when Modi came to power. Infiltration has been stopped, and almost all militant groups in the state are returning to the mainstream," he claimed.
Fadnavis claimed that the state's demography would have changed and Assam's history would have been rewritten under the Congress rule.
"But the Modi government works not just for development, but also protects the state's identity, culture, history, and tradition," he said.
He told the gathering that the BJP-led government has ensured massive infrastructure development for the state.
Mentioning the Tata Group's semiconductor unit at Jagiroad, Fadnavis said, "It is a gift of Modi ji to Assam. It will place the state on the global map."
He added that countries with the ability to manufacture semiconductors will be global leaders in the future, and India has joined the elite ranks of a handful of nations.
Taking a dig at the Congress, Fadnavis alleged it had always adopted a "step-motherly attitude" towards the northeast, due to which the region did not see much development, and was embroiled in unrest.
He also criticised the opposition party for its "anti-national stance" during the West Asia crisis, claiming it was trying to create discontentment among the people by raising false doubts over the availability of LPG and fuel.
"We had also been in the opposition, but we had never acted in such a shameful manner," he said.
Taking a dig at state Congress president Gaurav Gogoi, who is also the opposition party's candidate in Jorhat, Fadnavis said, "Those in Lok Sabha should remain there. BJP will return to power, and he will have no work here."
Gogoi is also the opposition party's deputy leader in the Lok Sabha.
