Newsroom24x7 Business Desk

Mumbai: While Fitch Ratings have cut their growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, they still see Indian GDP growth to hold up reasonably well, at 6.8%, followed by 7.1% in FY21.

The RBI has adopted a more dovish monetary policy stance and cut interest rates by 25bp at its February 2019 meeting, a move supported by steadily decelerating headline inflation. In this backdrop, Fitch have changed their rate outlook and they now expect another 25bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged. On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers.

Our benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption, Fitch point out.