Global score company Moody’s on March 4 raised India’s growth forecast for 2024 calendar 12 months to 6.8%, from 6.1% estimated earlier, on the again of ‘stronger-than-expected’ financial knowledge of 2023 and fading international financial headwinds.
India’s actual GDP expanded 8.4% year-over-year within the fourth quarter of calendar 12 months 2023, leading to a 7.7% growth for full-year 2023.
“Capital spending by the government and strong manufacturing activity have meaningfully contributed to the robust growth outcomes in 2023,” Moody’s Investors Service stated.
“With global headwinds fading, the Indian economy should be able to comfortably register 6-7% real GDP growth,” it added.
“India’s economy has performed well and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8% from 6.1%. India is likely to remain the fastest growing among G20 economies over our forecast horizon,” Moody’s stated in its Global Macroeconomic Outlook for 2024. For 2025, the GDP growth is estimated at 6.4%.
The company stated high-frequency indicators present that the financial system’s robust September and December quarter momentum carried into the March quarter of 2024.
“Robust goods and services tax collections, rising auto sales, consumer optimism and double-digit credit growth suggest urban consumption demand remains resilient. On the supply side, expanding manufacturing and services PMIs add to evidence of solid economic momentum,” Moody’s stated.
This 12 months’s interim Budget targets capital expenditure allocation of ₹11.1 lakh crore or 3.4% of GDP in 2024-25 (fiscal 12 months 2025), 16.9% above the 2023-24 estimates. “We expect policy continuity after the general election and continued focus on infrastructure development,” Moody’s stated.
The company stated whereas non-public industrial capital spending has been sluggish to choose up, it’s anticipated to choose up with ongoing provide chain diversification advantages and buyers’ response to the federal government’s Production Linked Incentive scheme to enhance key focused manufacturing industries.
“The year 2024 is an election year for several G20 countries including India, Indonesia, Mexico, South Africa (Ba2 stable), the U.K. and the U.S. Implications of elections can go beyond borders and economic and public policy in today’s increasingly fractious world,” it stated.
“Leaders elected this year will influence domestic and foreign policies for the next four to five years. Businesses are accordingly responding to evolving geopolitical dynamics by reorganising supply chains and capital sources,” Moody’s stated.
It stated geopolitical realities can be influencing worldwide commerce flows, capital flows, worldwide migration traits and worldwide organisations within the years to come. Domestically, industrial and commerce insurance policies of a number of nations are intertwined with international coverage.
