S&P Global Ratings has retained the 6 per cent forecast for India’s economic growth for the financial year beginning April. This is projected to rise to 6.9 per cent in the following year.

In the quarterly economic update for Asia-Pacific, the rating agency also saw inflation rate easing to 5 per cent in2023-24, from 6.8 per cent in the current fiscal.

For the current financial year, it sees India’s GDP growth at 7 per cent. "India leads, with average growth of 7 per cent in 2024-2026,” the update said.

GDP is projected to rise to 6.9 per cent in the following two financial years — 2024-25and 2025-26 and rising to 7.1 per cent in 2026-27.

“In India, domestic demand has traditionally led the economy. But it has become more sensitive to the global cycle lately, in part due to rising commodity exports; and its year-on-year GDP growth slowed to 4.4 per cent in the fourth quarter (October-December 2022),’’ S&P pointed out.

According to the rating agency, the Reserve Bank of India is likely to raise its already high policy rate further following a recent upside surprise to inflation.

“In our view, India’s Consumer Price Index (CPI) inflation should moderate to 5 per cent in fiscal year 2024 (ending March 2024) but we also anticipate upside risks, including from weather-related factors,” it said.