S&P Global Ratings, a renowned credit rating agency, has decided to maintain 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. S&P’s decision is based on India’s domestic resilience, which has played a significant role in sustaining growth.
Leading the Growth Chart: India, Vietnam, and the Philippines
S&P Global Ratings’ quarterly economic update for the Asia-Pacific region reveals that India, Vietnam, and the Philippines are expected to lead in terms of growth rates, with each country projected to achieve around six percent growth. These nations have solid medium-term growth outlooks. The report emphasizes that Asian emerging market economies continue to be among the fastest growing, contributing to 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 FY 2023-2024, compared to 6.7 percent in the previous year. The agency anticipates a decline in fuel and core inflation due to lower crude prices and a moderation in demand, respectively. However, S&P suggests that the Reserve Bank of India (RBI) will delay interest rate cuts until early 2024, as the RBI aims to monitor consumer inflation moving toward 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 maintained the growth projections for the rest of the Asia Pacific region, citing domestic resilience as a contributing factor.
S&P Global Ratings’ decision to retain India’s GDP growth projection at six percent for FY 2023-2024 highlights India’s position as the fastest-growing economy in the Asia Pacific region. Alongside Vietnam and the Philippines, India is expected to experience robust growth rates. The report also indicates a softening of inflation in India and a delay in interest rate cuts by the RBI. While China’s growth forecast has been revised down, the rest of the region demonstrates resilience. These insights from S&P Global Ratings provide valuable perspectives on the economic landscape in the Asia Pacific region.
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