‘Latest GDP data not good enough’: Fitch cuts India’s 2017-’18 growth forecast further to 6.7%
The ratings agency had pared its projection for India’s economic growth this financial year in October, as well.
Fitch Ratings on Monday further trimmed its forecast for India’s economic growth in 2017-’18 to 6.7% from its earlier projection of 6.9%, PTI reported. Although the growth in Gross Domestic Product recovered in July-September after a five-quarter slowdown, the credit rating agency said the rebound was “weaker than expected”.
The ratings agency had cut its GDP growth forecast for India to 6.9% in October, from 7.4% earlier, after a prolonged period of slowing growth. The GDP growth had reached a three-year low of 5.7% in the quarter that ended on June 30, but it picked up to 6.3% in the next quarter.
In its latest projections, Fitch also reduced its projection of 7.4% growth in 2018-’19 to 7.3%.
Fitch’s report said the growth had repeatedly been disappointing in recent quarters, but it was partly because of one-off factors such as the demonetisation of high-value currency notes and the introduction of the Goods and Services Tax. Now, the agency expects growth to pick up again because of the government’s structural reforms, including the bank recapitalisation plan and impetus planned for the construction sector.