Moody's Slashes India's GDP Growth Rates To 7.7%

Moody's Investors Service expects India's GDP growth to slow from 8.3% in 2021 to 7.7% in Calendar Year 2022 and to decelerate further to 5.2% in CY 2023.

"Our expectation that India's real GDP growth will slow from 8.3 percent in 2021 to 7.7 percent in 2022 and to decelerate further to 5.2 percent in 2023 assumes that rising interest rates, uneven distribution of monsoons, and slowing global growth will dampen economic momentum on a sequential basis," the agency said in a note.

In March, Moody's had forecast that India's economy could expand at 8.8% in 2022. On Wednesday, India released its 1QFY23 real GDP which came in at 13.5%, with the GVA at 12.7% YoY, lower than market consensus.

"Q1FY23 GDP expectedly grew 13.5%, led by service-sector rebound. Despite sequential contraction, the strong YoY growth partly reflects the favorable base effect, as Q1FY22 growth was severely impacted by the Covid Delta wave. Growth disappointed in Manufacturing, partly owing to sequential easing in corporate profitability led by rising input costs and supply shortages. Private GVA growth remained steady at 12.2%," Emkay Global said in a note.