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Fitch Ratings Slashes India's GDP Growth Forecast To 6.7% For Current Fiscal

DIVYIA ASTHANA | 0
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| December 5 , 2017 , 12:38 IST

Although India's economy is showing signs of recovery after the fall due to demonetisation and the Goods and Service Tax (GST), US-based Fitch Ratings, one of the 'Big Three' credit rating agencies, has cut India's GDP growth forecast for the current fiscal from the earlier projected 6.9 percent to 6.7 percent.

Apart from this fiscal, Fitch has also reduced India's GDP growth forecast for the 2018-19 fiscal year from 7.4 percent to 7.3 percent.

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According to Fitch, while there is a rebound of the economy, it is weaker than expected. However, the ratings agency added that the GDP growth of India is expected to pick up in the next two years, based on the gradual implementation of the structural reform agenda and higher real disposable incomes.

"The Indian economy picked up in 3Q17 (July-September), with GDP growing by 6.3 percent year-on-year, up from 5.7 percent in 2Q17," Fitch said.

ALSO READ: Indian Economy To Witness Slow But Sustainable Recovery: Morgan Stanley

"However, the rebound was weaker than we expected, and we have reduced our growth forecast for the fiscal year to end-March 2018 (FY18) to 6.7 percent from 6.9 percent in the September GEO," it said in its latest GEO.

The ratings agency said that grows has "repeatedly disappointed" in recent quarters, partly due to 'one-off' factors such as the demonetisation and the GST implementation.

After a five-quarter slide in GDP growth, the Indian economy sprung back from a 3-year-low in the July-September quarter by expanding by 6.3 percent as manufacturing improved and businesses adjusted to the GST tax policy.