S&P retains India's growth forecast at 6.8%, expects interest rate cut in October

S&P Global Ratings on Tuesday maintained India's growth forecast for the current financial year at 6.8 percent. With this, the rating agency has expressed hope that the RBI will start cutting interest rates in its October monetary policy review.

In the economic scenario of Asia Pacific, S&P Global Ratings has maintained the GDP growth forecast for the financial year 2025-26 at 6.9 percent and said that solid growth in India will allow the Reserve Bank to focus on bringing the inflation rate within its prescribed range.

S&P said, "GDP growth in India slowed in the June quarter as high interest rates hit urban demand, consistent with our 6.8 per cent GDP forecast for the full fiscal year 2024-2025."

The Indian economy grew 8.2 per cent in the previous fiscal. S&P said the government will continue to make public expenditure for fiscal consolidation and infrastructure improvements, according to the Union Budget presented in July. The budget has set a capital expenditure of Rs 11.11 lakh crore in the current fiscal year ending March 2025.