Mumbai, March 26 (IANS): S&P Global Ratings on Tuesday raised India's growth forecast for 2024-25 by 0.4 per cent to 6.8 per cent on the back of strong domestic demand.

"For Asian emerging market (EM) economies, we generally project robust growth, with India, Indonesia, the Philippines, and Vietnam in the lead," S&P said in its Economic Outlook for the Asia Pacific.

In November, last year, S&P Global had projected India's growth to be 6.4 per cent in 2024-25 fiscal on robust domestic momentum.

However, despite the hike, the latest projection by the global rating agency is lower than 7 per cent estimates projected by the RBI and the Finance Ministry for the next financial year.

In largely domestic demand-led economies such as India, Japan and Australia, the impact of higher interest rates and inflation on household spending power reduced sequential GDP growth in the second half, S&P said.

S&P said it expects rate cuts of up to 75 basis points in India in the second half of the year in line with the US policy rates.

“In India, slowing inflation, a smaller fiscal deficit and lower US policy rates will lay the ground for the Reserve Bank of India to start cutting rates. But we believe more clarity on the path of disinflation could push this decision at least to June 2024, if not later,” S&P said.