Fitch Ratings on Monday saw India's growth for FY 2019-20 at 6.6 per cent and 7.1 per cent in 2021-22.
Fitch was optimistic on India's growth, saying that the monetary and regulatory easing from the Reserve Bank of India, along with a recovery in portfolio inflows, should support a recovery in credit to the private sector and reverse the drag from the negative credit impulse.
"Food inflation has already started to pick back up (at 2 percent yoy in May) and the government has increased cash transfers to farmers in its latest budget, all of which should support rural households' income and consumption," a Fitch report said.
India's GDP growth declined for the fourth consecutive quarter in 1Q19, with the economy expanding by 5.8 per cent yoy, down from a high of 8.1 per cent in 1Q18. This is the lowest growth outturn in five years.
The slowdown over the past year has been driven by steadily cooling activity in the manufacturing sector and, to a lesser extent, in agriculture.
"Weaker momentum has been mainly domestically driven, though export growth has also faltered more recently. Muted food price inflation has weighed on farmers' income and production," Fitch added.
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