Moody’s reduce 7% growth prediction for India in 2022
- ByStartupStory | November 11, 2022
Moody’s Investors Service revised its estimate of India’s economic growth for 2022 down to 7% on Friday, from 7.7% earlier in the year. Moody’s Investors Service has lowered its projections for India’s economic growth for the second time. The company revised its forecast for the current year in September, bringing it down to 7.7 percent from the 8.8 percent it had anticipated in May.
This might be linked to external headwinds that the Indian economy has been suffering, such as a slowdown in global growth and a tightening of monetary policy.
“The real GDP growth predictions for India in 2022 have been reduced from 7.7 percent to 7 percent, reflecting the current economic climate. The lower adjustment is based on the assumption that increased inflation, high interest rates, and slowing global growth would all have a more depressing effect on economic momentum than we had previously anticipated “according to the organization’s report titled “Global Macro Outlook 2023-24.”
About Moody’s
Moody’s forecasts that growth would go up to roughly 6.4 percent in 2024 after first picking up speed to around 4.8 percent in 2023.
It was said that the global economy is on the edge of a slump because of very high levels of uncertainty brought on by persistent inflation, monetary policy tightening, fiscal issues, geopolitical upheavals, and volatile financial markets.
The rate of global expansion will decelerate in 2023 and stay low through 2024. However, if governments and central banks are successful in guiding their economies through the issues that are now being faced, Moody’s predicts that by the year 2024, a period of relative stability might develop.
Since May, India’s Monetary Policy Committee has opted for a cumulative 190 basis point increase in the key policy rate, which has brought the repo rate back to levels seen prior to the implementation of Covid, whereas the Federal Reserve has opted for a steep 75 basis point increase in each of the last four meetings, which has brought borrowing costs in the world’s largest economy to their highest level since 2008.
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