India is poised for a robust economic performance, with S&P Global (NYSE:SPGI) Ratings upgrading its forecast for the country's GDP growth in FY24 to 6.4%, aligning with predictions from the Reserve Bank of India (RBI). However, the forecast for FY25 has been adjusted downward in a similar fashion. The adjustment reflects a broader expectation of a strong rebound to a 7% growth rate in the years following, echoing recent revisions by the International Monetary Fund (IMF).
An Economic Times poll suggested that India's economy may have performed better than anticipated, with a second-quarter FY24 surge estimated at 6.7%, surpassing the RBI's own projections. This follows an energetic first quarter, which saw growth peak at 7.8%. Despite a slowdown in the service sector during the second quarter, robust manufacturing and construction activities have maintained economic momentum, as evidenced by high-frequency data including infrastructure indices, according to DBS.
The next update on India's GDP is expected by the end of November, which will provide further insights into the country's economic trajectory. Factors contributing to this positive outlook include persistent urban consumption and a recovery in rural markets. These elements are expected to drive gains in the current fiscal year, bolstered by an aggressive increase in government capital expenditures in the first half—nearly one-third higher—laying the groundwork for private sector investment and future fiscal prosperity.
S&P's optimism about Asia-Pacific's growth prospects for 2023 has been set at 4.7%, with China's economic recovery contributing to regional uplift. India, however, continues to stand out, maintaining its status as the fastest-growing major economy into 2026, slightly ahead of Vietnam in the regional economic rankings.
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