Fitch slashes India's FY23 GDP growth forecast to 7 per cent

Fitch Ratings on Thursday slashed its India's economic growth forecast for current fiscal year to 7 per cent from previous estimate of 7.8 per cent.

Fitch said compared to its June forecast of 7.8 per cent growth, it now expects the economy to grow 7 per cent in 2022-23, with next fiscal year also slowing to 6.7 per cent from earlier estimate of 7.4 per cent.

“We expect the economy to slow given the global economic backdrop, elevated inflation and tighter monetary policy," the rating agency said.

“Inflation moderated in August as crude oil prices eased, but the risk to food inflation persists given negative seasonality towards the end of this year," they added.

Since the central bank has said its future rate decisions would be calibrated, measured and nimble depending on economic dynamics, Fitch said it expects policy rates to peak in the near future and remain at 6% all through next year.