Good news for Indian economy, Moody's raises India's GDP growth forecast from 6.1 percent to 6.8 percent

Indian Economy: International credit rating agency Moody's has expressed a positive outlook on the Indian economy. Moody's has raised India's GDP growth forecast to 6.8 percent from 6.1 percent. According to Moody's, in the year 2023, the government has made significant improvements in capital expenditure and strong manufacturing activities, which have had a positive impact on the economy.

In the year 2023, the Indian economy grows at the rate of 7.7 percent

According to Moody's report, India's GDP growth in the fourth quarter of the year 2023 has been 8.4 percent. This has been happening for years. In such a situation, the Indian economy has grown at the rate of 7.7 percent in the entire year of 2023. Despite unfavorable conditions globally, the Indian economy should easily achieve 6-7 percent GDP growth.

GDP growth forecast to be 6.4 percent in 2025

Moody's said in its Global Macroeconomic Outlook 2024, 'India's economy has performed well and we have raised our growth forecast for 2024 to 6.8 per cent from 6.1 per cent due to stronger than expected figures in 2023. India will be the fastest growing economy among the G-20 countries. India's GDP growth is estimated to be 6.4 percent in 2025.'

Why did Moody's raise the forecast?

The strong momentum of the economy from the September and December quarters will continue till the March quarter of 2024. Strong GST collections, increased vehicle sales, consumer confidence and double-digit growth suggest that urban demand is strong. On the supply side, the expansion in manufacturing and services PMIs is evidence of solid economic momentum. In this year's interim budget, the allocation for capital expenditure has been kept at Rs 11.1 lakh crore or equivalent to 3.4 per cent of GDP for 2024-25. Which is 16.9 percent more than the forecast for 2023-24.

Although private industrial capital expenditure growth remains subdued, it may pick up due to the benefits of supply chain diversification and investor response to the government's Production Linked Incentive (PLI) schemes. The year 2024 is an election year for G-20 countries like India, Indonesia, Mexico, South Africa, Britain and the US. The impact of the election is visible beyond borders. The leaders elected in these elections will have an impact on domestic and foreign policies for the next four to five years.