Moody's cuts India's GDP growth projection for 2022
Published On: Friday, November 11, 2022 | By: Team KnowMyStock
Moody's today(11 November 2022) slashed India's GDP growth projection for 2022 to 7 percent on the expectation that global slowdown and high domestic interest rates would dampen economic momentum. For India, the 2022 real GDP growth projections have been lowered to 7 percent from 7.7 percent. The downward revision assumes higher inflation, high-interest rates, and slowing global growth will dampen economic momentum by more than we had previously expected, said the Global Macro Outlook 2023-24. Moody's expects growth to decelerate to 4.8 percent in 2023 and then to rise to 6.4 percent in 2024. The Indian economy grew 8.5 percent in the 2021 calendar year, according to Moody's. As per official GDP estimates, the economy expanded 13.5 percent in April-June 2022-23, higher than the 4.10 percent growth clocked in January-March. GDP figures for the September quarter would be released at the end of this month.
Moody's said the weakening of the rupee and high oil prices continue to exert upward pressures on inflation, which has remained above the RBI's tolerance level of 6 per cent for much of this year.
Retail inflation increased to 7.41 per cent in September, while wholesale inflation remained in double digit for the 18th straight month at 10.7 per cent.
The central bank has hiked interest rates by 190 basis points between May and September to 5.90 per cent to contain inflation.
Moody's expects the RBI to raise the repo rate by another 50 basis points or so as part of its objective to tame inflation and support the exchange rate.
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