Moody’s, the global rating agency, revised India’s growth forecast for the calendar year 2024 to 6.8%, up from the previous estimate of 6.1%. This adjustment comes in light of India’s robust economic performance in 2023, with real GDP expanding by 8.4% year-over-year in the fourth quarter and 7.7% for the full year. Factors contributing to this growth include increased government capital spending and a strong manufacturing sector.
The agency anticipates that India will maintain its position as the fastest-growing economy among G-20 nations over the forecast period. High-frequency indicators suggest continued momentum in the economy, with strong tax collections, rising auto sales, and consumer optimism driving urban consumption demand. Additionally, expanding manufacturing and services sectors indicate solid economic momentum on the supply side.
Looking ahead, Moody’s projects a GDP growth rate of 6.4% for 2025. It expects policy continuity post-general elections and a continued focus on infrastructure development, despite private industrial capital spending initially lagging behind. The geopolitical landscape, especially as 2024 marks an election year for several G-20 countries, will shape economic policies and international dynamics, influencing trade flows, capital sources, and geopolitical strategies in the coming years.
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