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India’s economic outlook for 2024 has received a positive boost, with a Moody’s report forecasting a notable increase in GDP growth from 6.1% to 6.8%. The report highlights the country’s robust economic performance, particularly in the wake of strong data recorded in the December 2023 quarter.
Moody’s cited the stellar growth witnessed in the Indian economy, along with significant advancements in exports and imports, as key factors contributing to the revised GDP projections. The agency also predicts a continued upward trajectory for India’s GDP growth, estimating it at 6.4% for 2025, compared to the earlier forecast of 6.3%.
According to Moody’s Global Macroeconomic Outlook for 2024, India’s economy has outperformed expectations, leading to the upward revision of GDP estimates. The report asserts that India is poised to maintain its position as the fastest-growing economy among G-20 nations in the foreseeable future.
The agency attributes India’s strong economic performance to various factors, including robust goods and services tax collections, rising auto sales, consumer optimism, and double-digit credit growth. Additionally, expanding manufacturing and services PMIs indicate solid economic momentum on the supply side.
In anticipation of the upcoming Lok Sabha polls, Moody’s expects policy continuity and a continued emphasis on infrastructure development, which are likely to further bolster economic growth.
While private industrial capital spending has been relatively sluggish, Moody’s anticipates an uptick in investment activity, driven by ongoing supply chain diversification benefits and the government’s Production Linked Incentive scheme aimed at boosting targeted manufacturing industries.
Moody’s latest prediction follows India’s impressive real GDP expansion of 8.4% year-over-year in the fourth quarter of calendar year 2023, resulting in a full-year growth rate of 7.7% for 2023.
Looking ahead, India’s interim budget for fiscal year 2025 targets a capital expenditure allocation of ₹11.1 lakh crore, representing 3.4% of GDP, marking a significant increase from the previous fiscal year’s estimates.
Sources By Agencies
