Fitch Ratings on Thursday raised its growth forecast for the Indian economy to 6.3% for the current fiscal year from the earlier estimate of 6%, PTI reported.

In a statement, the ratings agency cited robust growth in the first quarter and strong near-term momentum as the reasons for the latest outlook.

“The economy also continues to benefit from high bank credit growth and infrastructure spending with more to come from the latter,” it added.

The Reserve Bank of India expects India’s gross domestic product to grow by 6.5% in 2023-’24.

On Thursday, Fitch Ratings said that India will be hit to an extent by the slowdown in global trade. But the government’s push to increase capital expenditure, moderate commodity prices and ensure robust credit growth are expected to support investment, it said.

“Slowing inflation should also start to help consumers over time and households have now turned more optimistic about future earnings and employment,” the ratings agency added.

Although inflation has eased in recent months, Fitch Ratings warned that the monsoon outlook and the potential impact of El Nino pose a risk in the second half of this year.

“With growth expected to moderate further, and inflationary pressures easing, we expect the RBI to pause its rate cycle for the time being before cutting early next year – a change from our previous call of one more 25 bps [basis points] increase to 6.75%,” Fitch said.