Credit rating agency, S&P Global Ratings in its latest report has slashed India's economic growth forecast to 7 per cent for current fiscal year (FY23) and 6% in the next fiscal year. The agency had in September projected the Indian economy to grow 7.3 per cent in 2022-23 and 6.5 per cent in next fiscal year (2023-24).
As per the report, the global slowdown will have less impact on domestic demand-led economies such as India, Indonesia and the Philippines. Indonesia and the Philippines should both grow at least 5% in 2023. In some countries the domestic demand recovery from COVID has further to go. This should support growth next year in India, Indonesia, Malaysia, the Philippines, and Thailand.
S&P Global Ratings further projected inflation to average 6.8 per cent in India in current fiscal year and RBI's benchmark interest rate to rise to 6.25 per cent by March 2023. To control price rise, RBI has already hiked interest rate by 1.9 percentage points to a 3-year high of 5.9 per cent.
