Moody’s Ratings has raised India’s real GDP growth projection to 7.2% ( up from 6.8%) in FY 2024 and 6.6% (up from 6.4%) for FY 2025. The revised estimates are on account of robust broad based growth, fuelled by resilient private consumption and improved business conditions.
As per Moody’s, in the first quarter of 2024, the Indian economy expanded 7.8% year-on-year. This was despite a tight monetary policy and efforts towards fiscal consolidation. The report also highlighted that the Purchasing Managers’ Index (PMI), has remained over 60 since the start of the year. Thereby reflecting a thriving industrial and services sector.
The report also indicated that household consumption is set to increase as headline inflation eases towards the RBI’s target. “Indeed, signs of a revival in rural demand are already emerging, on the back of improving prospects for agricultural output amid above-normal rainfall during the monsoon season,” it said.
The Capex cycle is anticipated to pick momentum due to rising capacity utilisation, boost in business confidence, and the government’s emphasis on infrastructure spending.
Fitch Affirms ‘BBB’ Ratings
Meanwhile, Fitch affirmed India’s sovereign credit rating at ‘BBB’. Thereby, indicating strong medium term growth and a robust external finance position.
According to Fitch’s report, the election results indicate a broad continuity. However, coalition politics will likely hinder the government’s ability to implement changes.
On growth front, Fitch stated that India is expected to continue to be one of the world’s fastest-growing sovereign nations. It projected India’s GDP to grow at 6.5% in FY26 and 7.2% in the current fiscal year.
Apart from Fitch several other agency’s have predicted a positive growth outlook for India.
Overall, according to Moody’s, India is in a macroeconomic ‘sweet-spot’ with robust growth and moderating inflation, which fell from 5.1% in June to 3.5% in July. Meanwhile, fresh GDP data for the April-June quarter is set to release toady. Rating agencies like Icra expects India’s GDP to grow at 6% in Q1FY25 while State Bank of India (SBI) pegs Q1 GDP at 7.1%
 in FY 2024 and 6.6% (up from 6.4%) for FY 2025.){kind=link}