Moody’s India Growth Forecast- Update

February 25, 2022

The GDP growth prediction for India has been raised by Moody’s Investors Service. The prediction for the current financial year has been raised to 9.5 percent from 7 percent.

Overview:

The GDP forecast has been increased citing an economic recovery that has been stronger than expected starting from the national lockdown of 2020 to the COVID-19 second wave in mid-2021.
The FY 23 GDP forecast has been retained at 5.5 percent.
According to Moody’s, the retail activity, collection of sales taxes, and Purchasing Managers Indices (PMI) all point to further growth. Supply disruptions and high oil prices will, however, continue to drag down the GDP.
Moody’s has also said that the forecast of 9.5 percent for 2022 has been based on restricted consecutive growth rates.
It has also added that the budget of 2022 has prioritized growth and the RBI’s monetary policy supports it.

What does the calendar year forecast say?

According to the calendar year predictions, growth for FY 23 will be 8.4 percent growth and for FY24 it will be 6.5 percent.

The projection for FY23 is 60 basis points higher than what the Reserve Bank of India forecasted at 7.8 percent. The central government’s Economic Survey for 2021-22, however, forecasted a real GDP growth rate of 8 to 8.5 percent for the next financial year. The budget of the year 2022 assumed an 11.1 percent nominal GDP growth rate.

About Moody’s Investors Service

Moody’s Investors Service which is often referred to as Moody’s, is Moody’s Corporation’s bond credit rating business. This organization provides financial research globally on the bonds which are issued by a government and commercial organizations. Moody’s, along with Fitch Group and Standard & Poor’s, is considered to be the Big Three credit rating agencies. It is headquartered in New York.

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