S&P Global Ratings on Tuesday made fresh estimates about India's economic growth rate for the current financial year 2024-25. It maintained India's growth forecast at 6.8 percent on Tuesday. The agency expects the Reserve Bank of India (RBI) to start cutting interest rates in its October monetary policy review. According to Bhasha news, in the economic scenario of Asia Pacific, S&P Global Ratings has maintained the GDP growth forecast for the financial year 2025-26 at 6.9 percent.
Solid growth in India will help in this
According to the news, it was said that solid growth in India will allow the Reserve Bank of India (RBI) to focus on bringing inflation in line with its target. The rating agency said that high interest rates in India in the April-June quarter affected urban demand and GDP growth remained slow. However, this is in line with our GDP growth forecast of 6.8 percent for the entire financial year 2024-25. In the previous financial year 2023-24, the Indian economy grew at a rate of 8.2 percent.
RBI will start cutting rates in October
S&P said that we expect the RBI to start cutting rates in October at the earliest and plan to cut rates twice in the current fiscal year (ending in March 2025). S&P estimates that inflation will average 4.5 percent in the current fiscal year. The government has given the RBI a target of keeping inflation at four percent with a variation of two percent on either side. The Monetary Policy Committee of the RBI, which sets the interest rate, is scheduled to meet on October 7-9.
To keep inflation under control, the central bank has kept the policy rate unchanged at 6.5 percent since February 2023. The US central bank Federal Reserve has also cut its policy interest rate by 0.50 percent. After this, RBI is expected to cut it by 0.25 percent next month.
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