On March 4, global rating agency Moody’s upped India’s growth prediction for the calendar year 2024 to 6.8%, up from 6.1% before, citing ‘stronger-than-expected’ economic data in 2023 and diminishing global economic headwinds. “India is likely to remain the fastest-growing among G-20 economies over our forecast horizon,” the report said.
India’s real GDP increased 8.4% year on year in the fourth quarter of calendar year 2023, culminating in 7.7% growth for the whole year.
“Capital spending by the government and strong manufacturing activity have meaningfully contributed to the robust growth outcomes in 2023,” the credit rating agency Moody’s Investors Service stated.
“With global challenges fading, the Indian economy is expected to be able to easily attain 6-7% real GDP growth,” the report said.
Expected growth of the Indian Economy
“The Indian economy has fared well, and stronger-than-expected data in 2023 has prompted us to lift our 2024 growth projection to 6.8% from 6.1%. According to Moody’s Global Macroeconomic Outlook for 2024, India is expected to continue to be the fastest growing of the G20 economies throughout the projection period. GDP is expected to expand by 6.4% in 2025.
The agency stated that high-frequency data suggest that the economy’s robust September and December quarter momentum continued into the March quarter of 2024.
Interim Budget
The Interim Budget for 2024-25 (fiscal year 2025) aims to allocate capital spending of ₹11.1 lakh crore, or 3.4% of GDP, which is 16.9% more than the 2023-24 forecasts. “We predict policy stability after the general election including continuing focus on infrastructure development,” Moody’s said in a statement.
While private industrial capital investment has been slow to increase, the agency expects it to increase as a result of continuous supply chain diversification advantages and investor reaction to the government’s Production Linked Incentive plan to promote major targeted manufacturing industries.
Elections in 2024- to affect the economies beyond borders
“In 2024, numerous G20 nations will hold elections, including India, Indonesia, Mexico, South Africa (Ba2 stable), the United Kingdom, and the United States. Election implications can extend beyond borders, economics, and public policy in today’s more divided world,” it stated.
The leaders that will be chosen this year will shape home and foreign policy for the next four to five years. Businesses are adapting to changing geopolitical dynamics by restructuring supply networks and financial sources is what Moody’s stated.
It said that geopolitical realities will have an impact on international trade flows, money flows, migration trends, and international organisations in the next years. Domestically, numerous nations’ industrial and trade strategies are interwoven with their international policies.
