India's real gross domestic product (GDP) grew at 7.7 per cent in 2023, up from 6.5 per cent in 2022, driven by robust capital spending by the government and strong manufacturing activity.
High-frequency indicators, including robust goods and services tax collections, rising auto sales, consumer optimism and expanding manufacturing purchasing managers’ index have signalled sustained economic momentum in the first quarters this year, Moody’s said in its update to Global Macro Outlook 2024-25.
Private industrial capital spending is also set to pick up with ongoing supply chain diversification and the government's production linked incentive (PLI) scheme to boost targeted manufacturing industries, the rating agency noted.
Companies have invested around ₹1.07 trillion till December 2023 across the 14 sectors covered under the PLI scheme, with exports surpassing ₹3.40 trillion since the scheme's implementation, as per government data.
''Healthy corporate and bank balance sheets, rising capacity utilisation and upbeat business sentiment also point to an improving private investment outlook,'' it added.
The central bank held the repo rate steady at 6.5 per cent in April this year, unchanged since February 2023. ''Given the solid growth dynamics and inflation above the 4 per cent target, we do not expect policy easing any time soon,'' Moody's Ratings added.
ALCHEMPro News Desk (DS)
Receive daily prices and market insights straight to your inbox. Subscribe to AlchemPro Weekly!
marketing@alchempro.com
