New Delhi, Sep 24 (IANS): S&P Global Ratings on Tuesday retained India's growth forecast at 6.8 per cent for the fiscal 2024-25, while reducing China's economic growth by 0.2 per cent to 4.6 per cent in the calendar year 2024.

In its quarterly economic outlook for the Asia-Pacific region, the global rating agency said, "In India, GDP growth moderated in the June quarter as high interest rates temper urban demand, in line with our projection of 6.8 for GDP for the full fiscal year 2024-2025."

India's solid growth allows the Reserve Bank of India (RBI) to focus on bringing inflation in line with its target.

The rating agency also retained India's growth forecast for FY 2025-26 at 6.9 per cent. Meanwhile, S&P further reduced China's GDP growth to 4.3 per cent in the calendar year 2025.

The July budget confirmed that the government remains committed to fiscal consolidation and to keeping the focus of public expenditure on infrastructure.

In Budget 2024-25, Finance Minister Nirmala Sitharaman allocated a total of Rs 11.11 lakh crore for capital expenditure. The central government also has set a target to bring down the fiscal deficit below 4.5 percent of GDP by FY 2025-26.

India will see a first-rate cut in October as Inflation is within RBI's target.

According to the report, "The RBI considers food inflation a hurdle for rate cuts. It reckons that unless there is a lasting and meaningful decline in the rate at which food prices are increasing it will be tough to maintain headline inflation at 4 per cent. Our outlook remains unchanged: we expect the RBI to begin cutting rates in October at the earliest and have penciled in two rate cuts this fiscal year (year ending March 2025)."

S&P reduced China's GDP growth forecast for 2024 to 4.6 per cent from 4.8 per cent. This reflects the country's sluggish property sector, weak domestic demand generally, and reluctance among policymakers to ease fiscal policy.