Moody's gives negative credit outlook to nations for 2023

As many as 13 nations, including India, would spend over 20 per cent of their government revenue in servicing debt next year, it forecast.

As governments dedicate a growing share of their revenue to interest payments, the policy dilemma between servicing creditors and meeting populations’ demands for social and economic developments will intensify, it said.

Global gross domestic product (GDP) growth will slow to 1.7 per cent next year from 3 per cent this year as higher prices and tighter monetary policy hurt consumer spending, investment and economic sentiment.

Asia would outperform other regions. Large Asian countries like India will grow in excess of 4.5 per cent as domestic consumption, investment and tourism return to normal, Moody’s said.

Moody’s recently said global growth will slow in 2023 and remain sluggish in 2024. In its Global Macro Outlook 2023-24, India’s GDP growth projection for 2022 was cut to 7 per cent from 7.7 per cent, citing global slowdown, high inflation and rising domestic interest rates.

The growth is projected to decelerate to 1.3 per cent in 2023 for G-20 economies.

ALCHEMPro News Desk (DS)