India’s GDP to develop 6-7.1% throughout 2024-2026, progress prospects stay robust: S&P
India GDP: India’s financial progress prospects ought to stay robust over the medium time period, with GDP increasing 6-7.1 per cent yearly in fiscal years 2024-2026, S&P Global Ratings mentioned on Thursday.
In a report titled ‘Global Banks Country-By-Country Outlook 2024’, S&P mentioned the banking sector’s weak loans will decline to 3-3.5 per cent of gross advances by March 31, 2025, on the again of structural enchancment, together with wholesome company stability sheets, tighter underwriting requirements and improved risk-management practices.
Interest charges in India are unlikely to rise materially, and this could restrict the danger for the banking business, it added.
“Unsecured personal loans have grown rapidly and could contribute to incremental NPLs. We believe underwriting standards for retail loans generally remain healthy and overall level of delinquencies remains within acceptable limits for this product category,” S&P Primary Credit Analyst Deepali Seth Chhabria mentioned.
The report mentioned that world uncertainties may have a lesser affect on the Indian economic system.
Slower world progress and exterior demand will weigh on financial exercise and will gas additional inflation. However, on condition that India is domestically oriented, the company expects the financial progress to be much less affected, it added.
“Economic growth momentum to continue. India’s economic growth prospects should remain strong over the medium term, with GDP expanding 6-7.1 per cent annually in fiscal years 2024-2026,” S&P mentioned.
India’s actual GDP rose 7.8 per cent year-on-year within the June quarter, up from 6.1 per cent within the March quarter.
The Reserve Bank of India has forecast a 6.5 per cent financial progress for the 2023-24 and 2024-25 fiscal years.
The report additional mentioned that the State Bank of India and the main private-sector banks have largely addressed their asset-quality challenges.
Many public-sector banks nonetheless carry comparatively excessive volumes of weak property, which is able to end in larger credit score losses and hit profitability; their efficiency lags that of the business.