Moody's increases India's GDP growth forecast from 6.1% to 6.8%

Utkarsh Classes Last Updated 06-03-2024

Moody's increases India's GDP growth forecast from 6.1% to 6.8%

Economy 5 min read

Global rating agency Moody's has increased India's GDP growth forecast from 6.1% to 6.8% in March 2024. Moody's has increased India's GDP growth forecast for the 2024 calendar year on the basis of India's strong economic data.

Earlier, Moody's had given this estimate as 6.1%. This estimate of Moody's has come when India has recorded its GDP growth rate of 8.4% in the December quarter.

India's GDP growth projections for 2025:

Rating agency Moody's has estimated India's GDP growth for 2025 at 6.4%.
This upgrade of Moody's for India comes on the basis of stronger than expected economic data for 2023. At the same time, after the December quarter figures, Barclays has increased its forecast for India for 2023-24 by 110 basis points to 7.8%.

India is the fastest-growing economy among G-20 countries:

Moody's said in its Global Macro Economic Outlook for 2024, 'India's economy has performed well. The stronger-than-expected data in 2023 has led us to raise our 2024 growth estimate from 6.1% to 6.8%. India is likely to remain the fastest growing economy among the G-20 countries.
According to Moody's Investors Service, government capital expenditure and strong manufacturing activity support strong growth outcomes in 2023.
With global economies slowing, the Indian economy should register 6-7% real GDP growth.
According to the agency, the strong momentum of the December quarter has continued in the March quarter of 2024 as well. The main reasons behind this growth in India include:
- Strong GST collection
- Auto Sales
- Consumer Optimism
- Double Digit Credit Growth
- Urban Consumption
- Manufacturing and Services.

According to NSO India's GDP grew by 8.4% in Oct-Dec quarter:

The National Statistical Office (NSO) had released the data in early March. According to which, GDP growth has increased to 8.4% in the October-December quarter of the financial year 2023-2024.
GDP has increased due to better performance of manufacturing and mining sectors. GDP was 7.6% in the last quarter.
The higher-than-expected growth was driven by strong urban consumption, manufacturing and higher government spending. Whereas a year ago, in the third quarter of 2022-23, GDP had grown by only 4.5%.

GDP growth better than RBI estimates:

This GDP growth is better than RBI's estimate. RBI had estimated GDP growth to be 6.5% in the third quarter.
S&P has raised India's GDP growth forecast for FY2024 to 6.4%. Earlier it was 6%. Strong domestic momentum has been cited as the reason for this.

About Gross Domestic Product (GDP):

GDP is one of the most common indicators used to track the health of an economy.
GDP represents the value of all goods and services produced within a country in a specific time period. In this, the foreign companies which produce within the country's borders are also included.

Types of GDP:

Generally there are two types of GDP. Real GDP and Nominal GDP.
In real GDP, the value of goods and services is calculated at the base year's value or stable price. At present the base year for calculating GDP is 2011-12.
Whereas nominal GDP is calculated at current price.