Moody’s Raises India’s GDP Growth Forecast for 2024

Moody’s Raises India’s GDP Growth Forecast for 2024 mind map
Recent News
Moody’s upgrade
To 6.8% from 6.1%
Announcement date
March 4, 2024
Stronger-than-expected economic data in 2023
Strong manufacturing and construction activities
High frequency indicators
Robust GST collections, Rising auto sales, Consumer optimism, Double-digit credit growth
Previous estimate
New forecast for 2025
Q4 2023 real GDP growth
8.4% YoY
Full-year growth 2023
Economic momentum
High frequency indicators suggest urban consumption demand remains robust
Expanding manufacturing and services PMIs
Moody's Investors Service
Other forecasts mentioned
Barclays revised forecast to 7.8% for 2023-24
Government capital spending, Thriving manufacturing sector
Signs of private capex cycle picking up
Fastest growing among G-20 economies
Indicates strong economic resilience and momentum
Inflation remains above central bank's 4% target
Moody's does not expect policy easing anytime soon
Way Forward
Continued focus on infrastructure development
Policy continuity post general election
Adaptation to changing geopolitical dynamics due to election year for several G-20 countries

Moody’s Investors Service recently raised India’s GDP growth forecast for the year 2024 to 6.8% from an earlier estimate of 6.1%. This revision is attributed to stronger-than-expected economic performance in 2023, including significant growth in manufacturing and construction activities. India’s economy had shown an impressive growth rate of 8.4% year-over-year in the fourth quarter of 2023, leading to a full-year growth of 7.7%. Factors such as robust Goods and Services Tax collections, rising automobile sales, consumer optimism, and double-digit credit growth have contributed to this positive outlook. Despite the strong growth dynamics, Moody’s highlighted concerns over inflation, which remains above the Reserve Bank of India’s 4% target, suggesting that policy easing may not occur in the near future. Additionally, Moody’s projects that G20 economies will collectively grow by 2.4% in 2024, indicating that India’s growth rate is significantly higher than the average for G20 nations​​​​​​.

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