India's GDP mid-term growth forecast has been upgraded by 70 basis points by ratings agency Fitch. This brings the country's medium-term potential growth estimates to 6.2 per cent from the earlier 5.5 per cent.
India is expected to grow at 6.3 per cent in 2023-24, added the Fitch report.
While cutting China's growth forecast to 4.6 per cent from 5.3 per cent, Fitch said a reduction of 0.7 percentage points in the estimate of China's supply-side growth potential led to downgrading of estimate of 10 emerging countries to 4 per cent from 4.3 per cent.
"The reduction is mainly due to a large reduction of 0.7 percentage points to the estimate of China's supply-side growth potential," the Fitch report said. "However, we have made large upgrades to India and Mexico, with the latter benefitting from a much better outlook for the capital-to-labour ratio. India's estimate is higher at 6.2 per cent from 5.5 per cent and Mexico's at 2 per cent from 1.4 per cent.”
Other countries that got upward revisions are Poland, Turkey, Brazil and Indonesia. “We have revised the estimate for Poland to 3.0% from 2.6%, that for Turkey to 4.1% from 3.9%, that for Brazil to 1.7% from 1.5% and that for Indonesia to 4.9% from 4.7%,” the report read.
Russia's forecast has been reduced to 0.8 per cent from 1.6 per cent while Korea estimates was cut to 2.1 per cent from 2.3 per cent and South Africa to 1 per cent from 1.2 per cent.
Except Brazil and Poland, estimates for the top 10 emerging markets, known as EM10, remained below Fitch's pre-pandemic potential growth projections, according to the agency. "This reflects deteriorating demographic trends and the legacy of disruptions from the pandemic. The latter is partly reflected through revisions to projections for capital stock and productivity growth," the report added.
