Moody's Slashes India's Economic Growth Projections To 7% From 7.7% For 2022

In a setback, Moody's on Friday cut India's GDP growth projections for the ongoing year to 7% from 7.7% earlier amid global slowdown and surging domestic interest rates that will dampen economic momentum.

It is worth noting that this is the second time that Moody's Investors Service has lowered growth estimates of India. Earlier this year in September, Moody's had cut projections for the current year to 7.7% from 8.8% estimates in May, according to a PTI report.

"For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent. The downward revision assumes higher inflation, high-interest rates and slowing global growth will dampen economic momentum by more than we had previously expected," the agency said in its Global Macro Outlook 2023-24.

Moody's assumes growth to slow to 4.8% in 2023 and to pick momentum to nearly 6.4% in 2024, stated PTI report.

According to reports, world economy is on the verge of a slump amid unusually high level of ambiguity amid stubborn inflation, monetary policy tightening, fiscal challenges, geopolitical shifts, and financial market instability, among others, added the PTI report.

Global growth will slow in 2023 and remain sluggish in 2024. Still, a period of relative stability could emerge by 2024 if governments and central banks manage to navigate their economies through the current challenges, stated Moody's.