Fitch Ratings, an American credit rating agency, has revised its forecast for India's gross domestic product (GDP) growth rate for the coming fiscal year 2024-25 to seven percent, citing robust domestic demand and improving business and consumer confidence. This is an upward revision from the previous forecast of 6.5 percent. The country's economy showed strong performance in the third quarter (October-December) of the current fiscal year, achieving a growth rate of 8.4 percent, exceeding expectations. Fitch therefore assumes that the economic growth rate for the current 2023/24 financial year will be 7.8 percent, slightly above the government's estimate of 7.6 percent.

In its latest Global Economic Outlook, the rating agency noted that India's economic growth exceeded quarterly estimates, driven by an increase in domestic demand. Investment growth increased by 10.6 percent annually, while private consumption increased by 3.5 percent. In addition, Fitch Ratings raised its global growth forecast for 2024 by 0.3 percentage points to 2.4 percent. The agency remains optimistic about future growth prospects, pointing to near-term improvement.

Fitch Ratings has raised its growth estimate for the US to 2.1 percent. In the World Economic Outlook for December 2023, this estimate was 1.2 percent. The agency said: “The slight reduction in China's growth forecast has no impact due to the improving growth prospects of the United States of America.” China's growth estimate was revised downwards from 4.6 to 4.5 percent. In addition, Fitch Ratings adjusted the euro region's growth estimate from 0.7 percent to 0.6 percent.

Earlier, Moody's Ratings had raised the estimate of India's GDP (gross domestic product) growth rate from 6.6 per cent to around eight per cent for the financial year 2023-24, given the rise in capital expenditure and domestic consumption. This estimate came a day after RBI Governor Shaktikanta Das's statement. In the statement, he said economic growth in the current fiscal year could be close to eight percent given the official third quarter GDP numbers. Moody's latest estimate is 1.40 percent higher than the November 2023 estimate of 6.6 percent.