S&P Global Ratings on Monday raised India's growth forecast for the current financial year to 6.4 per cent, from 6 per cent, saying that robust domestic momentum has offset headwinds from high food inflation and weak exports.

The US-based rating agency, however, has cut growth estimates for the next fiscal (2024-25) to 6.4 per cent, as it expects growth to slow in the second half (October-March) of the current fiscal, on higher base impact and subdued global growth.

"We have revised up our projection for India's GDP growth for fiscal 2024 (ending in March 2024) to 6.4 per cent, from 6 per cent, as robust domestic momentum seems to have offset headwinds from high food inflation and weak exports.

"Still, we expect growth to slow in the second half of the fiscal year amid subdued global growth, a higher base, and the lagged impact of rate hikes. As a result, we have lowered our outlook for growth in fiscal 2025 to 6.4 per cent, from 6.9 per cent," S&P said.

The Indian economy grew 7.2 per cent in 2022-23 fiscal ended March 2023. India's GDP expanded 7.8 per cent in April-June quarter.

In its Economic Outlook for Asia Pacific, S&P said growth this year and the next is on track to be the strongest in emerging market economies with solid domestic demand — India, Indonesia, Malaysia, and the Philippines.

Fixed investment has recovered considerably more than private consumer spending in India, it said.

In India, there was a transitory spike in food inflation in the July-September quarter, but it appears to have had little effect on underlying inflation dynamics.

Still, headline inflation remains above the Reserve Bank of India's target of 4 per cent, suggesting it will be a while before the rate cycle turns, S&P said.

"In Australia, India, and the Philippines, lingering inflation risks are keeping central banks occupied. The government plans to expand fiscal policies in several countries could complicate central banks' policymaking," S&P said.

Risks remain but so too does the potential for growth in the region. In coming months, the spotlight may shine a little more brightly on emerging markets where domestic demand is strong, the rating agency said.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.