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Credit rating agency, Fitch Ratings in its latest report has raised India’s Gross domestic product (GDP) growth forecast by 0.3 percentage points to 6.3 per cent for current fiscal year (FY24) from 6 per cent it had predicted previously. This is primarily because of a stronger outturn in the first quarter and near-term momentum.

The Fitch noted that the GDP growth in January-March was higher than expected, adding that there has been a recovery in manufacturing, after two consecutive quarterly contractions, a boost from construction and an increase in farm output. In expenditure terms, GDP growth was driven by domestic demand and a boost from net trade.

The agency had in March lowered its forecast for 2023-24 to 6 per cent from 6.2 per cent citing headwinds from elevated inflation and interest rates along with subdued global demand. For 2024-25 and 2025-26 fiscal years, it estimated a growth of 6.5 per cent each.