Ratings agency Fitch has raised India's GDP forecast for the financial year 2023-24 to 6.3 percent from 6 percent, following a near-term momentum and a strong outturn in the first quarter.

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"India's economy has been showing broad-based strength — with GDP up by 6.1 per cent year-on-year in 1Q23 (January-March) and autosales, PMI surveys and credit growth remaining robust in recent months — and we have raised our forecast for the fiscal year ending in March 2024 (FY23-24) by 0.3 percentage points to 6.3 per cent," the rating agency said.

Earlier, in March, Fitch had reduced its rating for India to 6 percent from 6.2 percent after considering challenges due to high inflation and interest rates besides a weak global demand.

The growth forecast compares with 7.2 per cent GDP expansion in FY23. In the previous fiscal year (FY22), the economy had grown 9.1 per cent.

Inflation has moderated since and the domestic economy has picked up.

Stating that GDP growth in January-March was higher than expected, Fitch said 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.

(With agencies' inputs)

(Edited by : Pradeep John)

First Published:Jun 22, 2023 1:22 PM IST