By Malvika Gurung
Investing.com — Factors like the European gas crisis, decades-high inflation and a swiftly rising pace of global monetary policy tightening have led the ratings agency Fitch Ratings to cut the economic growth forecasts of all major economies.
Amid the ongoing macro conditions and the ultra-hawkish prospects of monetary policy by major economies, Fitch expects RBI to continue hiking the in the upcoming months and raise it to 5.9% until the end of the year.
The ratings agency said, “The RBI remains focused on reducing inflation, but said that its decisions would continue to be ‘calibrated, measured and nimble’ and dependent on the unfolding dynamics of inflation and economic activity.
We, therefore, expect policy rates to peak the near future and to remain at 6% throughout next year”.
The agency has slashed India’s forecast for FY22 from 7.8% to 7% and for the next fiscal from 7.4% to 6.7%. The revised projection is less than the central bank RBI’s growth forecast of 7.2%.
The global economic growth has been pared to 2.4% from 2.9% in 2022 and for the upcoming year, it has been cut to 1.7% to an earlier forecast of 2.7% amid the European gas crisis, high inflation, and a sharp acceleration in the pace of global monetary policy tightening, as per Fitch’s Global Economic Outlook report.