New Delhi: International rating agency, Moody’s Investors Service retained India’s economic growth forecast for 2023 at 6.7%. The agency said that strong domestic demand will likely sustain the growth in the near term.
‘We expect India’s real GDP to grow about 6.7% in 2023, 6.1% in 2024 and 6.3% in 2025,’ Moody’s said in its Global Macroeconomic Outlook 2024-25.
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‘Robust goods and services tax collections, surging auto sales, rising consumer optimism and double-digit credit growth suggest urban consumption demand will likely remain resilient amid the ongoing festive season. However, rural demand, which has shown nascent signs of improvement, remains vulnerable to uneven monsoons that could lower crop yields and farm income,’ Moody’s said.
‘With exports remaining weak amid an unfavourable global economic backdrop, strong domestic demand will likely sustain growth in the near term. Domestic demand dynamics beyond the festive season will depend on the trajectory of inflation and the lagged impact of the RBI’s monetary policy tightening,’ it added.
Earlier the agency had affirmed its ‘Baa3’ rating on India. The agency said that India is one of the fastest growing economies in the world. India’s potential growth has improved to 6-6.5% from sub-6% levels during the coronavirus pandemic. However, India’s potential growth rate remains lower than estimates in excess of 7% in the middle of the last decade.
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