Fitch, the global credit rating agency, has revised its forecast for India's gross domestic product (GDP) mid-term growth, increasing it by 0.7 percent to 6.2 percent, up from the previous estimate of 5.5 percent. At the same time, the agency has reduced its estimate for China's growth by 0.7 percent.
Fitch has also lowered its estimate for the growth of 10 emerging economies to 4 percent from the earlier estimate of 4.3 percent. These adjustments in growth forecasts reflect changing economic conditions and outlooks in the respective countries.
"The reduction is mainly due to a large reduction of 0.7 percentage points to the estimate of China's supply-side growth potential," Fitch said in its report "Emerging-Market Potential Growth Weakens as China Slows". China's mid-term growth forecast has been cut to 4.6 per cent from 5.3 per cent earlier.
"However, we have made large upgrades to India and Mexico, with the latter benefiting from a much better outlook for the capital-to-labour ratio. India's estimate is higher at 6.2 per cent from 5.5 per cent and Mexico's at 2 per cent from 1.4 per cent," it added.
Fitch has made several adjustments to its growth forecasts for various countries. The forecast for Russia has been reduced to 0.8 percent from 1.6 percent, for Korea to 2.1 percent from 2.3 percent, and for South Africa to 1 percent from 1.2 percent. These revisions reflect changing economic conditions in these countries.
Fitch noted that its latest growth estimates for the top 10 emerging markets (EM10) are below its pre-pandemic potential growth projections for all of them, except Brazil and Poland. This suggests that while many countries have shown economic recovery, they have not yet fully regained their pre-pandemic growth potential.
(With Agency Inputs)
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