New Delhi: Moody's Ratings on Friday projected India's growth to be at 6.8 per cent in the current year, followed by 6.5 per cent in 2025 on the back of strong economic expansion as well as continuity of post-poll policy.
India's real GDP is expected to grow by 7.7 per cent in 2023 from 6.5 per cent in 2022 due to strong capital expenditure by the government and strong manufacturing activity.
High-frequency indicators including strong goods and services tax collections, rising auto sales, consumer optimism and expansion in manufacturing and services PMIs have indicated sustained economic momentum in the March and June quarter this year.
"We believe the Indian economy should comfortably register 6-7 per cent annual real GDP growth and we forecast growth of around 6.8 per cent," Moody's said in its update to the Global Macro Outlook 2024-25.
It said strong, broad-based growth is likely to persist with policy continuity after the elections.This year's interim budget targets a capital expenditure allocation of Rs 11.1 lakh crore, or 3.4 per cent of GDP, in 2024-25, 16.9 per cent higher than the estimate for 2023-24, Moody's said.
“We expect continuity in policy and continued focus after the general elections
Infrastructure development,” it said.
Moody's Ratings said private industrial capital expenditure is also set to increase with ongoing supply chain diversification and government production-linked incentives (PLI scheme to promote targeted manufacturing industries).
According to government data, companies have invested around Rs 1.07 trillion till December 2023 in the 14 sectors covered under the PLI scheme, with exports exceeding Rs 3.4 trillion since the implementation of the scheme.
It added, “Healthy corporate and bank balance sheets, rising capacity utilization and an upbeat business sentiment also point to an improving private investment outlook.,
However, sporadic food price pressures remain volatile in the inflation trajectory, with headline and core inflation slowing to 4.8 per cent and 3.0 per cent in April, respectively, sharply below their respective 2022 peaks of 7.8 per cent and 7.1 per cent. Is.
The RBI in April kept the repo rate unchanged at 6.5 percent through February 2023.
"Given the solid growth dynamics and inflation above the 4 per cent target, we do not expect policy easing in the near future," Moody's Ratings said."
India's real GDP is expected to grow by 7.7 per cent in 2023 from 6.5 per cent in 2022 due to strong capital expenditure by the government and strong manufacturing activity.
High-frequency indicators including strong goods and services tax collections, rising auto sales, consumer optimism and expansion in manufacturing and services PMIs have indicated sustained economic momentum in the March and June quarter this year.
"We believe the Indian economy should comfortably register 6-7 per cent annual real GDP growth and we forecast growth of around 6.8 per cent," Moody's said in its update to the Global Macro Outlook 2024-25.
It said strong, broad-based growth is likely to persist with policy continuity after the elections.This year's interim budget targets a capital expenditure allocation of Rs 11.1 lakh crore, or 3.4 per cent of GDP, in 2024-25, 16.9 per cent higher than the estimate for 2023-24, Moody's said.
“We expect continuity in policy and continued focus after the general elections
Infrastructure development,” it said.
Moody's Ratings said private industrial capital expenditure is also set to increase with ongoing supply chain diversification and government production-linked incentives (PLI scheme to promote targeted manufacturing industries).
According to government data, companies have invested around Rs 1.07 trillion till December 2023 in the 14 sectors covered under the PLI scheme, with exports exceeding Rs 3.4 trillion since the implementation of the scheme.
It added, “Healthy corporate and bank balance sheets, rising capacity utilization and an upbeat business sentiment also point to an improving private investment outlook.,
However, sporadic food price pressures remain volatile in the inflation trajectory, with headline and core inflation slowing to 4.8 per cent and 3.0 per cent in April, respectively, sharply below their respective 2022 peaks of 7.8 per cent and 7.1 per cent. Is.
The RBI in April kept the repo rate unchanged at 6.5 percent through February 2023.
"Given the solid growth dynamics and inflation above the 4 per cent target, we do not expect policy easing in the near future," Moody's Ratings said."
