Ratings agency Fitch has cut India’s growth forecast for next fiscal to 8.5 per cent on high energy prices due to the impact of the Russia-Ukraine war on the global economy. With the Omicron wave subsiding quickly, containment measures have been scaled back, setting the stage for a pick-up in GDP growth momentum in the June quarter this year, it said.
It has revised upwards the GDP forecast for the current fiscal by 0.6 percentage points to 8.7 per cent.
“However, we have lowered our growth forecast for FY 2022-2023 to 8.5% (-1.8 pp) on sharply higher energy prices,” Fitch said while revising up its inflation forecasts.
Fitch now sees inflation strengthening further, peaking above 7 per cent in the December quarter of 2022, before gradually easing.
Another rating agency, Moody’s, last week also lowered India’s economic growth estimate for the calendar year 2022 to 9.1 per cent for its earlier projection of 9.5 per cent.