Moody’s said on Sunday that the Indian economy is expected to grow by 6–6.3 per cent in the June quarter and that there are risks of fiscal slippage because government revenues are lower than expected this fiscal.
Moody’s growth estimate is lower than the 8% projection for the main quarter made by the Reserve Bank a week ago.
Gene Fang, Associate Managing Director of Moody’s Investors Service, stated in an interview with PTI that India’s general government debt will be approximately 81.8% of GDP in 2022 and 23 and that the country will have low debt affordability.
India, he said, has a high development potential and its credit assets incorporate a steady homegrown supporting base for government obligations as well as a sound outer position.
Fang stated, “We expect India’s growth to come in around 6-6.3 per cent in the first quarter of the current fiscal year, which remains relatively flat from the 6.1 per cent recorded in the final quarter of fiscal 2022-23.”
“While household demand is probably going to see an improvement given the control in both headline and core inflation readings, slacked impacts of higher loan fees represent a few risks on fixed capital formation, specifically,” Fang added.
Gross Fixed Capital Formation, or GFCF, is a measure of economic investment.
Fang said that as a “Baa3”-rated sovereign, India’s assets lie in its huge and differentiated economy with a high development potential, obvious in the somewhat solid development figure this year despite the weaker global economic outlook.
He stated that concerns regarding fiscal policy have been alleviated by the government’s accomplishment of its fiscal objectives over the past two years.
From 6.7% of GDP in 2021–22, the fiscal deficit, or the difference between government spending and revenue, decreased to 6.4% in 2022–23.
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