S&P Ratings has raised its forecast for India’s GDP growth during the current financial year to 6.4 per cent from the earlier 6 per cent.

“We have revised upwards our projection for this fiscal as robust domestic momentum seems to have offset headwinds from high food inflation and weak exports,” S&P Global Ratings chief economist for Asia-Pacific Louis Kuijs said in a research note on the outlook for the region.

However, the rating agency has lowered its outlook for growth in the next financial year (2024-25) to 6.4 per cent from 6.9 per cent earlier, taking into account a higher base impact and subdued global growth.

S&P’s higher projection for the current financial year (2023-24) is in line with other agencies, but still lower than the government and Reserve Bank of India projection of 6.5 per cent.

The IMF, World Bank, ADB and Fitch expect India’s GDP to expand 6.3 per cent in the current fiscal.

The Indian economy grew 7.2 per cent in the 2022-23 financial year and 7.8 per cent in the April-June quarter.

The second quarter GDP data will be released later this week.

Economists expect the GDP growth to slow down in July-Sept quarter due to the erratic monsoon this year.

On inflation, S&P said the surge during the second quarter is unlikely to have an impact on overall inflation.

“Still, headline inflation remains above the RBI’s target of 4 per cent, suggesting it will be a while before the rate cycle turns,” S&P said.

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