Moody's upgrades India's 2024 GDP growth forecast to 6.8%
NEW DELHI : Rating agency Moody's on Monday raised its forecast for India's GDP growth in 2024, reflecting both global and domestic optimism in the country's economy on the back of robust manufacturing activity and infrastructure spending. "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%," the rating agency said in its Global Macro Outlook 2024-25.
"India is likely to remain the fastest-growing among G-20 economies over our forecast horizon," it added. The Indian economy soared ahead in the December quarter (the third quarter of FY24) with a surprise growth of 8.4%, belying fears of tempering as the manufacturing, electricity and construction sectors put up a robust show.
The statistics ministry also raised its GDP growth estimate for FY24 to 7.6% in its second revised estimate, up from 7.3% in its first advance forecast. The Reserve Bank of India’s GDP growth estimate for FY24 is 7%, while the International Monetary Fund’s forecasts 6.7%.
"We believe that with global headwinds fading, the Indian economy should be able to comfortably register 6.0%-7.0% real GDP growth and we therefore forecast around 6.8% growth in calendar year 2024, followed by 6.4% in 2025," Moody’s said. "Capital spending by the government and strong manufacturing activity have meaningfully contributed to the robust growth outcomes in 2023.
We expect policy continuity after the general election and continued focus on infrastructure development," it added. Moody's said while private industrial capital spending in India has been slow, it is expected to pick up with ongoing supply chain diversification benefits and investors' response to the government's
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