S&P Global Market revises China's growth forecast, still significantly lower than India

NEW DELHI: The S&P Global Market Intelligence has marginally increased its GDP forecasts for China from 4.5 per cent to 4.6 per cent primarily due to anticipated policy tailwinds extending into the next year and a gradual improvement in private-sector sentiment. However it will still be significantly lower than India's forecast.

S&P projects India's GDP to grow at 6.7 per cent in 2024 and 6.3 per cent in 2025 whereas China's economy is now expected to grow at 5.0 per cent in 2024.

Meanwhile, the Reserve Bank of India (RBI) has increased GDP forecast from 7 per cent to 7.2 per cent for FY25 in its monetary policy held earlier this month.

"The real GDP growth for the current financial year 2024-25 is projected at 7.2 per cent with Q1 at 7.3 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent. The risks are evenly balanced. The GDP growth projection, we have increased it from 7 per cent to 7.2 per cent and the inflation projection, the average for the year, we have retained it at 4.5 per cent as it was in the last MPC meeting," said RBI governor Shaktikanta Das.

Additionally, S&P Global Market Intelligence has lowered the growth forecasts for the US, Canada, Brazil, and Japan for 2024, while revising upward the forecasts for China, the Eurozone, the UK, and Russia.

The global growth forecast for 2025 has slightly increased from 2.7 per cent to 2.8 per cent, with higher forecasts for some larger countries, including the US and China.

The agency further believes that the Bank of Japan's next rate hike is most likely to occur in October 2024, given the economic and inflationary challenges.

In the Asia-Pacific region, excluding mainland China and Japan, the agency predicts that real GDP growth will remain broadly stable at 4.4 per cent in 2024 and 2025, driven by strong domestic demand and recovering exports. The key growth driver for the region in 2024 is expected to be an increase in overseas demand.

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