Moody's attributed this adjustment to India's dynamic and robust economy, citing a strong performance in the second quarter of this financial year.
New Delhi: Moody's Investors Service, the international rating agency, has made a significant upward revision to its economic growth projection for India in 2023. According to a statement released on Friday, Moody's anticipates India's economic growth rate for the year to reach 6.7 percent. This marks a notable increase from their previous estimate of 5.5 percent. Moody's attributed this adjustment to India's dynamic and robust economy, citing a strong performance in the second quarter of this financial year.
In its Global Macro Outlook report, Moody's highlighted that India's GDP growth reached 7.8 percent in the second quarter (April-June) compared to the previous year. This impressive performance led to the upward revision of India's growth forecast from 5.5 percent to 6.7 percent for the current financial year.
The final quarter of the previous financial year (January-March) saw a GDP growth rate of 6.1 percent, which subsequently surged to 7.8 percent in the following quarter. It's worth noting that the Reserve Bank of India (RBI) had earlier projected a GDP growth rate of 7.7 percent for the April-June period, and the actual growth rate exceeded these expectations. The Central Statistics Office attributed this robust growth to various factors, including increased demand for goods and services, as well as higher production levels in sectors such as steel, cement, and electricity, along with notable increases in coal and natural gas production in July.
Moody's emphasized that India's domestic economic fundamentals have strengthened, contributing to the improved growth outlook. Furthermore, the agency has raised expectations for a considerably higher growth rate in the second quarter of 2023. However, Moody's did lower its fiscal growth forecast for 2024, revising it down to 6.1 percent from the earlier projection of 6.5 percent.
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