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Informist, Friday, Dec. 20, 2024

NEW DELHI - S&P Global Market Intelligence has lowered its India GDP growth forecast for 2024-25 (Apr-Mar) after growth moderated sharply in Jul-Sept. India's GDP growth slowed to 5.4% in the quarter ended September from 6.7% a quarter ago, which has resulted in a downward revision for full year forecast to 6.5% from 6.8% earlier, the S&P Global arm said. 

It expects growth to further moderate in FY26 and FY27 to 6.4% and 6.2%, respectively. "While India may benefit from some trade diversion from mainland China and weaker global crude oil prices, higher US yields and the weaker Indian rupee imply tighter monetary policy in 2025," S&P Global Market Intelligence said in its December edition of the 'Global Economic Forecast'. "This scenario will weigh on domestic demand, the key driver of India's growth."

S&P Global Market Intelligence's GDP growth forecast for FY25 is lower than the Reserve Bank of India's projection of 6.6%. The economy had expanded 8.2% in FY24.

For the Asia-Pacific region, excluding mainland China and Japan, real GDP growth is projected to moderate in 2025 and 2026. Growth in the region is expected to moderate because of an expected slowdown in mainland China, weaker global trade, renewed pressure on local currencies and less monetary easing.

"As we approach 2025, our attention is focused on the economic impact of potential policy changes in the US. Given the anticipated resurgence of inflationary pressures that are likely to halt the Fed's easing cycle, global financial conditions will be significantly less supportive than we had previously anticipated," said Ken Wattret, global economist at S&P Global Market Intelligence. "This poses challenges for economic growth, leading us to revise our forecasts downward across the board."

S&P Global Market Intelligence has lowered its annual US real GDP forecasts for 2025 and 2026 to 1.9% and 1.8%, respectively. The 2024 forecast is unchanged at 2.7%. The weaker growth outlook includes the S&P Global arm's initial take on policies likely to be implemented by the incoming Trump administration and Republican-controlled Congress, it said.  End

Reported by Shubham Rana

Edited by Vandana Hingorani

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