S&P Global Ratings on Tuesday raised India’s growth forecast for the next financial year to 6.8%, but flagged restrictive interest rates as a dampener for economic growth.
The Indian economy is estimated to have clocked a growth of 7.6% in the current fiscal.
n November, last year, the U.S.-based agency had projected India’s growth to be 6.4% in 2024-25 fiscal on robust domestic momentum.
“For Asian emerging market economies, we generally project robust growth, with India, Indonesia, the Philippines, and Vietnam in the lead,” S&P said in its Economic Outlook for the Asia Pacific.
In largely domestic demand-led economies such as India, Japan, and Australia, the impact of higher interest rates and inflation on household spending power reduced sequential GDP growth in the second half, S&P said.