NEW DELHI: Global rating major Moody’s Investors Service on Wednesday raised the country’s growth projection for 2023-24 to 5.5% from the 4.8% it had pegged earlier in November 2022 on the back of a sharp increase in capital expenditure in the Budget and a resilient economic momentum. However, it scaled down its GDP growth forecast to 6.8% for 2022-23, from an earlier projection of 7%.
“In the case of India, the upward revisions additionally incorporate the sharp increase in capital expenditure budget allocation to Rs 10 trillion (3.3% of GDP) for fiscal year 2023-24, up from Rs 7.5 trillion for the fiscal year ending in March 2023,” Moody’s said while projecting a 70 basis points increase in 2023 real GDP growth at 5.5% and 2024 growth at 6.5%.
Moody’s said as strong data in the second half of 2022 created large carry-over effects for 2023, India’s growth projection has been “meaningfully raised”. Moody’s said economic momentum in a number of large emerging market countries, including India, has proved more resilient to last year’s tightening in the global and domestic financial environment than it had anticipated.
An eventual let-up in monetary policy tightening in the US will help stabilise, if not improve, capital flows to emerging market countries, according to Moody’s. However, until inflation in advanced economies is in check, emerging markets will remain vulnerable to bouts of heightened market volatility, it said. Still, Moody’s expects global growth to continue to slow in 2023, with increasing drag from cumulative monetary policy tightening on economic activity and employment in most major economies.
Data revision behind fall in mfg
NEW DELHI: V Anantha Nageswaran, Chief Economic Advisor to the Government of India, on Wednesday said the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ due to higher base. Nageswaran added that the GDP growth base was inflated because of data revision for the past three years. The National Statistical Office (NSO) on Tuesday revised GDP data for past three years -- 2019-20, 2020-21 and 2021-22 and released second advance estimates of GDP for 2022-23. ENS