Winning Bizness Desk
Mumbai. Global rating agency Fitch has reduced India's economic growth forecast to 7% for the financial year 2022-23. Earlier in June, an estimate of 7.8% was projected. At the same time, the growth estimate for the financial year 2023-24 has been reduced to 6.7%, from 7.4% earlier. Fitch has said that the economy has improved with 13.5% year-on-year growth in the second quarter of the fiscal year, but this is below our estimate of 18.5% growth. Seasonally adjusted estimates indicate a decline of 3.3% on a quarterly basis. We expect a slowdown in GDP, given the state of the global economy, rising inflation and tight monetary policy.
RBI will increase the repo rate
Fitch believe that before the end of the year RBI will increase the repo rate to 5.90% as currently RBI's emphasis is on reduction in inflation. Fitch said that we expect the policy rate to reach its peak in the coming days and it will remain at 6% next year. With regard to global growth, Fitch expects world GDP growth to be 2.4% in 2022, 0.5% lower than the previous estimate. At the same time, the growth forecast for 2023 has been reduced by 1% to 1.7%.
Eurozone and the UK could see a recession
Fitch said the Eurozone and the United Kingdom could see a recession later this year and it is expected that the US may experience a mild recession in mid-2023. US growth has been reduced to 1.7% for 2022 and 0.5% for 2023. According to the National Statistical Office (NSO) data, GDP growth in the June quarter stood at 13.5%. It was 20.1% in the same quarter last year. The GDP growth rate in the last quarter was 4.1%. That is, the growth rate of the country was better than the previous ie January-March quarter.