India Ratings Projects Economy To Grow At 7.6 Percent In FY23

Moody’s: Bad news for India, slow growth rate will remain next year

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Moody’s Prediction Indian Economy: Moody’s Analytics has said about the Indian economy in the coming financial year that there is no possibility of recession in the APAC region, but there may be a decrease in economic growth due to the adverse conditions created by high interest rates and slow global trade growth. In a survey report titled ‘APAC Outlook A Coming Downshift’, Moody’s said that India is moving towards a slower growth rate next year in line with its long-term potential.

According to Moody’s report, better products and profits in agriculture along with inward investment and technology can accelerate the growth rate. But if high inflation persists, the Reserve Bank of India will raise its repo rate to more than 6 percent. If there is an increase in the repo rates, then the GDP growth rate will falter.

Moody’s reduced India’s growth rate

In August, Moody’s projected India’s growth rate for FY22 at 8 per cent. Moody’s has projected the growth rate for FY23 to be down to 5 percent. The growth forecast rate for FY21 was 8.1 percent.

Growth is declining due to global factor

The report said that the economy of the Asia-Pacific region is slowing down. The region, dependent on trade for economic growth, is feeling the effects of slowing global trade. The ongoing conflict between Ukraine and Russia has disrupted the supply chain.

China’s economy is slowing down

China is not the only weak link in the turmoil in the global economy. India, the second largest economy in Asia, has also been facing a trade deficit on an annual basis since October. The growth rate of the Indian economy depends more on domestic consumption and imports than on exports. Regarding the Asia region, Moody’s says that even though India as well as other major economies of the Asia Pacific region have been expanding since the pandemic, China’s sluggish economy is affecting the growth rate of the region.

According to Moody’s, a recession is not expected in the APAC region in the coming year, although the region will face headwinds from higher interest rates and slower global trade growth.

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