Indian growth forecast

           India's growth is projected at 6% for FY2024. In the medium- term growth outlook remains strong. The  economies of Asian emerging market  remain strong  among the fastest growing ones in  global growth outlook through 2026 as stated by  Asia-Pacific chief economist Louis Kuijs S&P Global Ratings.

           The retail inflation is likely to soften to 5 per cent this fiscal from 6.7 per cent ,which will ensure in the early next year the RBI to cut interest rates.

         In India, under the assumption of normal monsoons, we expect headline consumer inflation to soften to 5 per cent in 2024 from 6.7 per cent. Decrease in  crude prices and increase in demand will bring down fuel and core inflation.

“The inflation and rate hike cycles have peaked, it stated. But we expect the Reserve Bank of India to cut interest rates only in early 2024, as it wants to see consumer inflation moving to 4 per cent–the centre of its target range,” Kuijs stated.

S&P also has decreased the growth forecast for China to 5.2 per cent from 5.5 per cent for 2023.

“For the rest of the region, we have left it broadly unchanged, because of domestic resilience,” S&P stated.

Chief economic advisor of India (CEA) V.Anantha Nageswaran also said the Indian economy is expected to grow at 6.5% for rest of the decade with occasional growth of 7% in a year or so. He further stated that capital expenditure will be high in this fiscal which will add 0.5 to 1% higher than what is projected by rating agencies.

World bank also has stated that India will be the fastest growing economy in both aggregate and per capita GDP despite slowdown in growth. The major reasons are increase in private consumption and investment, and service sector growth.

     In the last MPC,monetary policy meet the RBI revised the inflation forecast for FY 2024. RBI has cut inflation aim to 5.1% from 5.2% forecast in April policy. The inflation will remain above 4% as uptick in food and commodity prices expanded from supply cut expectations. The rate hike and inflation cycles peaked. RBI wants inflation to be above 4%-Kuijs stated.