Global rating agency S&P on Friday again re-iterated India’s FY25 growth projection at 6.8% and opined that the Reserve Bank of India will begin its interest rate cuts in the upcoming monetary policy review slated for October. 

Well, S&P still noted a moderation in India’s GDP growth for the June quarter, and it attributes this to high interest rates affecting urban demand. It retained its GDP growth projection at 6.9% in FY26 while citing good economic performance that has enabled the RBI to focus its attention on bringing inflation in line with targets. 

Food inflation is, however, the challenge for the RBI to carry out its rate-cutting strategy. Actually, the central bank has rung in issues of reaching the overall inflation level to 4% at a time when it feels that food price inflation is not coming down substantially and sustainably. The agency expects an average inflation rate of 4.5% for this fiscal year and is expecting RBI to deliver the two interest rate cuts, and the first may also come next month. To combat the inflationary atmosphere, the RBI monetary policy committee is scheduled to meet between 7th and 9th October. As per the central bank, the repo rate has stood unchanged at 6.5% since February 2023. 

Through a framework formed by agreement between the government and the central bank, the latter pegs inflation within a range of ±2% of its target of 4%. India Growth Projections Hiked by Moody’s Analytics: The financial services firm has increased the estimate for the country’s GDP and predicts that it will expand by 7. As reported, a fiscal level with a growth rate of 6.5% and 6.6% in the fiscal years 2025 and 2026 respectively has been predicted. This year, India is going to clock in on excellent growth post-pandemic and expand by about 7. 

Moody’s Analytics increases its forecasts for India’s growth: The finance services firm raised estimates of the nation’s GDP, with the country now envisioned to grow at 7.1% in calendar year 2024, versus 6.8% forecasted prior. At the fiscal level, this growth is pegged at 6.5% and 6.6% for FY 2025 and FY 2026, respectively. Moody’s expects the Indian economy to grow around 7.8% in the next fiscal year, quite largely boosted by an impressive post-pandemic recovery this year. 

It says this within a cautiously optimistic context around India’s economic future against changing circumstance. 

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