Moody’s Ratings maintained its 7.2% economic growth forecast for India for the calendar year 2024 on Friday, despite worries about the moderation of urban demand and numerous high-frequency indicators indicating a slowdown. The agency cited rising capacity utilization, a sustained pick-up in rural demand, a likely improvement in household consumption, and the government’s ongoing push on infrastructure spending.
Macroeconomically speaking, the Indian economy is in a sweet place thanks to strong growth and moderate inflation. Moody’s stated in its Global Macro Outlook on Friday that it expects growth of 7.2% in 2024, 6.6% in 2025, and 6.5% in 2026. In 2023, the Indian economy expanded by 7.7%.
Despite a short-term spike, the agency stated that as food prices decline due to increased planting and sufficient foodgrain buffer inventories, inflation should gradually decline towards the Reserve Bank of India’s (RBI) objective in the upcoming months. The RBI’s cautious approach to policy easing is highlighted by the possible risks to inflation posed by increased geopolitical tensions and catastrophic weather events.
Despite new data indicating that activity is slowing down, the RBI maintained its October prediction that the Indian economy will grow by 7.2% in the fiscal year ending in March 2025. The RBI’s forecast is much more bullish than the finance ministry economists’ 6.5–7% growth estimate.
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