Global rating agency Fitch has raised India’s medium-term potential growth rate estimate by 70 basis (bps) to 6.2% due to improvement in the employment rate and working-age population. The agency has cut China’s potential growth rate by 70 bps due to a weaker outlook to employment rate and capital deepening.
Fitch Ratings has cut the estimate for China to 4.6% from 5.3%, for Russia to 0.8% from 1.6%, for Korea to 2.1% from 2.3% and for South Africa to 1% from 1.2%. However, it has made large upgrades to India and Mexico, with the latter benefitting from a much better outlook for the capital-to-labour ratio. India’s estimate is higher at 6.2% from 5.5% and Mexico’s at 2.0% from 1.4%.
It has also revised the estimate for Poland to 3% from 2.6%, that for Turkiye to 4.1% from 3.9%, that for Brazil to 1.7% from 1.5% and that for Indonesia to 4.9% from 4.7%.
“In India’s case, potential growth has increased by 0.7pp to 6.2% given an improvement in the employment rate and a modest increase in the working-age population forecast. India’s labour productivity forecast is also higher,” Fitch said.
