Global Rating agency ‘Fitch’ reduces India’s expected growth rate to 7% in 2022-23

Tags: Economy/Finance

Global Credit rating Agency Fitch has reduced the expected growth rate of the Indian economy in the current fiscal year (2022-23) to 7% from its earlier June estimates of 7.8%.

It has also reduced the expected growth rate of the Indian economy in 2023-24 to 6.7%.

The revision in the Indian GDP growth rate comes after the Indian grew by 13.5% in the first quarter of the current financial year (April –June) 2022 way below the RBI projected growth rate of 16.2%.

IMPORTANT FACTS -

Reason for reducing Indian Growth Rate :

  • According to Fitch, the growth rate in India is expected to slow down due to the uncertainty in the global economy, mainly due to the fear of recession in Europe and the United States and continuing Russia-Ukraine war.
  • It expects RBI to continue its tight monetary policy and expects its to increase its policy rates (Repo rate) to control Inflation which is likely to affect economic growth.

World Economic Growth :

  • Fitch expects the world economy to grow by 2.4% in the 2022 calendar year (January-December) and 1.7% in 2023.
  • It expects the Eurozone and the United States to enter into recession later this year.

Forecast for Indian Economy Growth Rate by Various agencies (till 16 September 2022) :

Agency /Institutions 

Forecast for 2022-23 

RBI 

7.2%

World Bank 

7.5%

International Monetary Fund 

7.4%

Asian Development Bank 

7.2%

SBI

6.8%

Moody Investor Service 

7.0%

India Rating 

6.9%

Standard and Poor (S&P)

7.3%

United Nations 

6.4%

OECD 

6.9%

ADDITIONAL INFORMATION -

Concept Clearing :

Recession :

  • When there is a negative growth in the economy for the two consecutive quarters then the economy is in recession. 


EURO ZONE :

  • It refers to those 19 European countries which have abolished their national currency and adopted Euro as their common currency.
  • Euro as a common monetary unit was introduced on 1 January 1999.
  • Member countries of Eurozone : Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland, Slovenia, Cyprus, Malta, Slovakia, Estonia, Latvia, and Lithuania.
  • The European Central Bank is the monetary authority of the Euro Zone countries. 


 

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