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Moody’s maintains its 6.7% growth estimate for India in 2023 due to robust domestic demand

<p>Investors Service by Moody’s India’s economic growth prediction for 2023 was kept at 6.7% on Thursday, with the statement that robust domestic demand will probably support the growth in the near future.<img decoding=”async” class=”alignnone wp-image-275692″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-download-2023-11-09t175457.814-11zon-1.jpg” alt=”theindiaprint.com download 2023 11 09t175457.814 11zon 1″ width=”1230″ height=”985″ title=”Moody's maintains its 6.7% growth estimate for India in 2023 due to robust domestic demand 6″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-download-2023-11-09t175457.814-11zon-1.jpg 251w, https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-download-2023-11-09t175457.814-11zon-1-150×120.jpg 150w” sizes=”(max-width: 1230px) 100vw, 1230px” /></p>
<p>India’s economy is being driven by continuous growth in domestic demand, according to Moody’s Global Macroeconomic Outlook 2024–25, despite the country’s exports being sluggish against an unfavorable global economic backdrop.</p>
<p>According to Moody’s, “We anticipate that India’s real GDP will grow by roughly 6.7% in 2023, 6.1% in 2024, and 6.3% in 2025.”</p>
<p>India’s real GDP increased 7.8% year over year in the June quarter compared to the March quarter’s 6.1% gain, driven by a 6% rise in household consumption, strong capital investment, and activity in the service sector.</p>
<p>According to Moody’s, high-frequency indicators indicate that the economy maintained its robust pace from the June quarter into July and September.</p>
<p>Strong collections of goods and services taxes, soaring vehicle sales, increasing consumer confidence, and double-digit credit growth indicate that demand for urban spending is expected to be strong over the present holiday season.</p>
<p>Though there have been some encouraging indications of recovery, inconsistent monsoons may still reduce agricultural yields and farm revenue, according to Moody’s.</p>
<p>On the supply side, it said that growing PMIs for manufacturing and services as well as the robust production growth of key sectors contribute to the evidence of a strong economy.</p>
<p>Given the unfavorable global economic environment and the continued weakness of exports, robust local demand is expected to support growth in the near future. The dynamics of domestic demand after the holidays would be determined by the trajectory of inflation and the delayed effects of the RBI’s tightening of monetary policy, the statement said.</p>
<p>September headline inflation fell back inside the RBI’s target range, easing to 5% from 6.8% in the previous month.</p>
<p>Despite the fact that core inflation also decreased to 4.5% from 4.8% in August, Moody’s said that the RBI would remain on guard due to anticipated surges in food and energy costs in the face of unpredictable weather and geopolitical unrest.</p>
<p>For the fourth consecutive meeting in October, the RBI maintained the repo rate at 6.5%. According to Moody’s, the central bank will probably not ease its monetary policy stance if inflation prints fall below 6%, as it reiterated at its October meeting that the target for inflation is 4%, not 2.6–6%.</p>
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