Moody’s on Friday slashed India’s GDP growth forecast to 7.7 per cent for 2022 from 7.7 per cent as a global slowdown and rising domestic interest rates will dampen economic momentum.
This is the second time that Moody’s Investors Service has cut India’s growth forecast. In September, it cut estimates for the current year to 7.7 per cent from 8.8 per cent projected in May.
“For India, the 2022 real GDP growth projections have been cut to 7 per cent from 7.7 per cent. The downward revision assumes higher inflation, higher interest rates and slower global growth, driving the economic momentum higher than previously expected. will reduce,” the agency said in its Global Macro Outlook 2023-24.
Moody’s expects growth to slow to 4.8 percent in 2023 and then to around 6.4 percent in 2024.
It said that the global economy is on the verge of recession amid exceptionally high levels of uncertainty amid persistent inflation, tightening of monetary policy, fiscal challenges, geopolitical changes and volatility in financial markets.
Global growth will slow down in 2023 and remain sluggish in 2024. Still, a period of relative stability could emerge until 2024 if governments and central banks manage to navigate their economies through the current challenges, Moody’s said.