Moody's slashes India's GDP forecast from 7.7% to 7% for 2022

“We have lowered our global economic growth expectations. We expect real GDP growth of the G-20 economies to decelerate to 1.3 per cent in 2023, significantly lower than our previous estimate of 2.1 per cent and down from an estimated 2.5 per cent growth this year,” Moody said in a statement. Various G-20 developing market countries have differing projections as their markets are directly influenced by their economic structure.

Several factors such as the Ukraine-Russia war, soaring inflation rates, and tightening of national monetary policies across the world resulted in the slashing of the economic growth forecast. Other countries along with India are also anticipated to deal with an economic slowdown soon, said several Indian media reports quoting Moody’s projection.

“We expect growth to decelerate to 4.8 per cent in 2023 and then to rise to around 6.4 per cent in 2024. Still, a period of relative stability could emerge by 2024 if governments and central banks manage to navigate their economies through the current challenges,” added Moody’s in a statement.

Moody’s also highlighted that India and Brazil are likely to not be negatively impacted economically in the near future. “Large domestically driven emerging market economies such as India and Brazil will be less vulnerable to weakening G-7 growth than will export-oriented countries,” noted Moody’s.

Moreover, the International Monetary Fund (IMF) also reduced India’s GDP forecast from 7.4 per cent to 6.8 per cent for FY23. The World Bank also slashed their FY23 projection of India’s GDP from 7.5 per cent to 6.5 per cent.

ALCHEMPro News Desk (NB)