Based on robust economic statistics, the global rating agency Moody's increased India's growth prediction for the 2024 calendar year to 6.8% from an earlier estimate of 6.1%. This comes after India's real GDP growth for the December quarter was reported to be 8.4% year over year, translating into a 7.6% rise for 2023–2024.
Following the release of the December quarter numbers, Barclays increased its projection for 2023–24 by 110 basis points to 7.8%, while Moody's upgraded its rating in response to stronger-than-expected economic data for 2023.
"India's economy has done well, and we have raised our growth projection for 2024 to 6.8% from 6.1% due to stronger-than-expected statistics in 2023. Over our prediction horizon, India is anticipated to continue to grow at the highest rate among the G-20 economies, according to Moody's Global Macroeconomic Outlook for 2024. Growth in 2025 was expected to reach 6.4%.
As per Moody's Investors Service, the government's capital expenditures and the robust manufacturing sector have both significantly boosted the projected robust growth prospects for 2023. It stated that the Indian economy should easily record real GDP growth of 6-7 percent as global headwinds fade.
According to the agency, the robust momentum from the December quarter continued into the March quarter of 2024. Strong GST collections, car sales, consumer confidence, double-digit credit growth, resilient urban consumption, rising manufacturing and services PMIs, and consumer optimism were all mentioned as contributors to the strong economic momentum.
After the general election, Moody's also anticipates policy stability and a sustained emphasis on infrastructure development. Although private industrial capital spending has been sluggish to increase, this is anticipated to change as a result of the continuous benefits of supply chain diversification and the reaction of investors to the Production Linked Incentive plan, which aims to support important targeted manufacturing industries.
The organization also emphasized how the elections may have effects that go beyond national boundaries and affect public policy and the economy. This year, there will be elections in a number of G20 nations, including the US, the UK, South Africa (Ba2 stable), Mexico, India, and Indonesia. According to Moody's, the new leaders will shape both international and domestic policy over the course of the next four to five years, changing supply networks and geopolitical dynamics.
