Recovery in tourism, higher electronics exports to drive growth in India, South Asia: Moody's
ICRA said in a recent report. The report added that the sustenance of domestic leisure and business travel, and demand from meetings, incentives, conferences, and exhibitions (MICE) are likely to drive demand in FY25 despite a lull during the Lok Sabha elections. As things stand, India remains the world’s fastest-growing major economy.
In December the Reserve Bank of India (RBI) revised its growth forecast for the economy in FY24 to 7%, up from its previous projection of 6.5%. This revision was due to higher-than-anticipated growth in the first two quarters of the financial year. The union government's estimate for GDP growth in FY24 is higher at 7.6% on the back of better-than-expected growth during the first three quarters.
Meanwhile, Moody's Analytics expects uncertainties from the flurry of elections this fiscal year, in which half the world's population will go to the polls. Elections in the US, the UK, India and South Africa will be among the most closely watched, it said in the report. "Economically, concerns regarding monetary policy missteps loom large.
Policy rates in much of the world remain elevated and central banks have signalled that they want to be sure inflation stays on target before easing policy settings," it said. "It would not take much to delay rate cuts, which creates a risk that authorities will keep rates too high for too long. At best, this would be an added drag on growth.
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