New Delhi (India), November 6 (ANI): In an upward revision, Fitch Ratings has raised India’s medium-term potential growth forecast from 5.5 per cent to a solid 6.2 per cent.
This positive development reflects the country’s growing economic resilience and potential for expansion.
This upgrade puts India in the spotlight for its strong growth trajectory.
Additionally, Mexico saw its growth estimate significantly increased, with Fitch revising it from 1.4 percent to 2.0 percent.
These positive developments were supported by a more favorable outlook for the capital/labour ratio.
The adjustments didn’t stop there. Fitch also revised its growth forecasts for other countries. Poland’s potential growth estimate was raised to 3.0 percent from 2.6 percent, Turkey’s to 4.1 percent from 3.9 percent, Brazil’s to 1.7 percent compared to 1.5 percent and that of Indonesia to 4.9 percent compared to 4.7 percent.
However, it wasn’t all good news. Fitch Ratings simultaneously lowered the growth estimate for China from 5.3 percent to 4.6 percent, reflecting a significant reduction in China’s supply growth potential.
Russia’s growth estimate fell to 0.8 percent from 1.6 percent, Korea’s to 2.1 percent from 2.3 percent and South Africa’s to 1 .0 percent versus 1.2 percent.
The overall trend across the ten emerging markets (EM) in Fitch’s Global Economic Outlook was a decline in potential growth, with the GDP-weighted average falling to 4.0 percent from the 4.3 percent estimate for hundred in 2021.
Most of this decline can be attributed to the substantial reduction in China’s supply growth potential.
Despite this, the unweighted average for EM10 countries remained stable at 3 percent, thanks to upward revisions in other markets.
Fitch acknowledges that the lingering effects of the pandemic and changing demographic trends are responsible for the overall slowdown in potential growth in EM10 countries.
The agency also made “level shock” adjustments to historical estimates of potential GDP in 2020 and 2021 for Mexico, Indonesia, India and South Africa, taking into account lingering scarring effects. .
In light of these adjustments and its forward-looking growth forecasts, Fitch projects that EM10 potential GDP will be 3.0 percentage points lower by 2027 compared to the trajectory based on potential growth estimates from ‘before the 2019 pandemic.
This reflects the challenges emerging markets continue to face in their quest for sustainable growth.
This positive revision to India’s growth potential is expected to provide a substantial boost to the country’s economic prospects, thereby strengthening its position as a promising global player in the medium term. (ANI)