Moody's lowers India's GDP growth projections for 2022 to 7 per cent

Moody's Investors Service on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier. It said the global slowdown and increasing domestic interest rates will set hurdles on the path of the country's economic momentum.

The forecast is in line with the projections made by the Asian Development Bank, Fitch Ratings and the country's own central bank, the Reserve Bank of India (RBI). The International Monetary Fund (IMF), however, had projected an even lower GDP growth of 6.8 per cent for India.

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“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," Moody's said in its Global Macro Outlook 2023-24.

Earlier, in the month of September, the New York-based bond credit rating agency had cut projections to 7.7 per cent from 8.8 per cent in May.

At the end of September 2022, while presenting India's latest bi-monthly monetary policy statement, RBI Governor Shaktikanta Das emphasised extended geopolitical tensions, tightening global financial conditions and expected decline in aggregate demand, as the factors posing risks to the downward trajectory of India's growth.

WATCH |IMF cuts global growth forecast for 2023, warns ‘the worst is yet to come’

The IMF Chief Economist Pierre-Olivier Gourinchas, while presenting World Economic Outlook Growth Projections, had said that the world's three largest economies -- the US, China, and European Union -- will continue to stall. "The worst is yet to come and for many people, 2023 will feel like a recession," he had said.

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