NEW DELHI: Rating agency Moody’s has retained India’s GDP growth projection at 6.7% for 2023.
In its report on Global Macro Outlook released on Thursday, it said sustained domestic demand is propelling India’s economy as it maintained India’s growth rate in 2023 at 6.7%. For 2024 and 2025, the agency expects India to grow at 6.1% and 6.3% respectively.
According to it, high-frequency indicators show the economy’s strong momentum in the April-June quarter carried into the September quarter. “Robust goods and services tax collections, surging auto sales, rising consumer optimism and double-digit credit growth suggest urban consumption demand will likely remain resilient amid the ongoing festive season,” says Moody’s.
Though it said demand dynamics beyond the festive season would depend on the trajectory of inflation and the lagged impact of the RBI’s monetary policy tightening. “Though core inflation also moderated to 4.5%, down from 4.8% in August, upside risks to headline CPI from potential spikes in food and energy prices amid erratic weather and geopolitical uncertainty will keep the RBI vigilant,” says the rating agency.
In another report on Thursday, Moody’s said India may face challenges in creating jobs in the long run due to low trade openness. “Bangladesh, India, Pakistan face greater challenges than Sri Lanka as young and growing populations necessitate the creation of significant numbers of jobs every year,” says the report.