INSUBCONTINENT EXCLUSIVE:
The rupee (INR) has been the worst-performing major Asian currency so far this yearNew Delhi: Fitch Ratings on Friday upped India's growth
forecast for the current fiscal year to 7.8 per cent, from 7.4 per cent projected earlier
The global ratings agency, however, flagged tightening of financial conditions, rising oil bill and weak bank balance sheets as headwinds to
growth."We have revised up our forecast for FY2018-2019 growth to 7.8 per cent from 7.4 per cent on the back of the better-than-expected
interest rates have been raised by more than anticipated," Fitch added.It also forecast inflation picking up to the upper part of the
central bank's target band (4 per cent, plus-minus 2 per cent) within the forecast horizon on relatively high demand-pull pressures and
rupee depreciation.The upward revision in growth forecast comes in the backdrop of GDP expanding 8.2 per cent in the April-June period,
higher than Fitch's expectation of 7.7 per cent."This robust performance was partly attributable to a powerful base effect, with GDP
growth dampened in 2Q17 (April-June) by companies de-stocking ahead of the rollout of the goods and services tax," Fitch said.It has cut the
growth forecasts for FY 2019-2020 and FY 2020-2021 growth by 0.2 percentage points to 7.3 per cent."Fiscal policy should remain quite
supportive of growth in the run-up to elections likely to be held in early 2019
The investment/GDP ratio has stopped trending down, helped by ramped-up public infrastructure outlays, in particular by state-owned
enterprises (SOEs)," it said.
