New Delhi : Global credit rating agency Fitch Ratings has slashed India’s economy growth forecast to 7 per cent for the current financial year. Predicting this revised forecast on Thursday, Fitch reported that the economy’s growth will slow due to rising inflation and raising interest rates by the central bank to control inflation.
In June, Fitch predicted that India’s economy would grow at a rapid rate of 7.8 per cent in the current fiscal. He lowered India’s growth forecast for the next fiscal from 7.4 per cent to 6.7 per cent. India’s growth rate for the April to June quarter in the current financial year stood at 13.5 per cent. Actually, Fitch had estimated it to be 18.5 percent.
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Aggressive interest rate hikes by central banks around the world have had an impact on the economy, according to a global forecast report released on Thursday. Internationally, despite oil prices falling below $100 a tick, the risk of food inflation remains high due to fears of an adverse impact on the food season. Retail inflation based on the Consumer Price Index remained at 7 per cent, while wholesale inflation hit an 11-month low of 12.41 last month (August 2022).
Like other credit rating agencies, Fitch Ratings has also cut its annual growth forecast after the April-June quarter growth rate fell by 13.5 per cent. Moody’s had predicted that India’s economy would grow at 8.8 percent in 2022. However, it is expected to further reduce to 7.7 per cent in 2022 and further fall to 5.2 per cent in 2023. Citigroup has reduced its growth forecast for the fiscal year 2022-23 to 6.7 per cent from the earlier 8 per cent. Whereas ‘Goldman Sachs’ has increased it from 7.2 percent to 7 percent.
signs of global recession
Fitch Ratings has predicted that countries in Europe, the Eurozone and the United Arab Emirates will enter recession later this year, and the world’s economic superpower the US will face a mild recession in the middle of next year. Restrictions imposed to prevent the spread of the corona virus in China and the crisis in the construction sector will limit recovery. China’s growth rate will slow to 2.8 percent this year and is projected to be limited to just 4.5 percent next year.
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