S&P Global ups India's FY24 GDP growth forecast to 6.4% from 6%

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

The rating agency, however, lowered the same for the next fiscal (FY25) to 6.4 per cent from 6.9 per cent earlier, as growth may slow in the second half amid subdued global growth, a higher base and a lagged impact of interest rate hikes from the central bank, media outlets in India reported.

It will take some time for India's interest rate cycle to turn as the headline inflation is still above the central bank’s target of 4 per cent, it noted.

S&P Global expects interest rates to fall by 100 basis points by March next year in the country.

It expects a gradual decline in inflation in the United States towards the Federal Reserve's target of 2 per cent and another rate hike in the December meeting and the first cut to take place only in mid-2024. It also expects China to grow in-line with its potential in 2024.

ALCHEMPro News Desk (DS)