Moody’s Raises India’s 2024 GDP Forecast to 6.8%: Fastest Growth Among G20 Economies

Ronit Kawale
Ronit Kawale  - Senior Editor
3 Min Read

Moody’s, the global rating agency, has increased its growth forecast for India in the 2024 calendar year from 6.1% to 6.8%, highlighting the country’s robust economic performance. This adjustment follows India’s reporting of a real GDP growth of 8.4% year-on-year in the December quarter, resulting in a 7.6% projection for the entire fiscal year 2023-24.

The upward revision by Moody’s is attributed to the ‘stronger-than-expected’ economic data of 2023. Barclays had previously revised its forecast by 110 basis points to 7.8% for 2023-24 after the December quarter figures.

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“India’s economy has performed well, and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8% from 6.1%. India is likely to remain the fastest growing among G-20 economies over our forecast horizon,” stated Moody’s in its Global Macroeconomic Outlook for 2024. The agency also predicted a 6.4% growth for 2025.

Moody’s Investors Service pointed out that government capital spending and robust manufacturing activity significantly contributed to the strong growth outcomes in 2023. With the diminishing global headwinds, it expects the Indian economy to comfortably achieve a real GDP growth rate of 6-7%.

The agency emphasized that the solid economic momentum observed in the December quarter continued into the March quarter of 2024. Factors driving this momentum include robust GST collections, auto sales, positive consumer sentiment, double-digit credit growth, resilient urban consumption, and expanding manufacturing and services PMIs.

Moody’s anticipates policy continuity post the general election and a continued focus on infrastructure development. Although private industrial capital spending has been slow, it is expected to pick up with ongoing supply chain diversification benefits and investor response to the Production Linked Incentive scheme targeting key manufacturing industries.

The agency also underscored the broader implications of elections in G20 countries, including India, Indonesia, Mexico, South Africa, the UK, and the US, occurring this year. Moody’s believes that elected leaders will influence domestic and foreign policies for the next 4-5 years, leading to evolving geopolitical dynamics and reorganized supply chains.

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