Fitch cuts India GDP growth forecast for FY20 to 6.8% on weaker-than-expected momentum in economy

New Delhi: Fitch Ratings on Friday cut India’s economic growth forecast for the next financial year starting 1 April, to 6.8 percent from its previous estimate of 7 percent, on weaker-than-expected momentum in the economy. [caption id=“attachment_2409676” align=“alignleft” width=“380”] Representational image. Reuters[/caption] “While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 percent, followed by 7.1 percent in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2 percent from 7.8 percent on 6 December. The rating agency has also cut growth forecasts for FY20 and FY21 to 7 percent from 7.3 percent and 7.1 percent from 7.3 percent, respectively. According to Fitch, the RBI, has adopted a more dovish monetary policy stance and cut interest rates by 0.25 percentage at its February 2019 meeting, a move supported by steadily decelerating headline inflation. “We have changed our rate outlook and we now expect another 25 bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said. “On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers,” it added. Fitch said, it’s benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption.