India's economy is expected to achieve a growth rate of 6-6.3% in the ongoing June 2023 quarter as per the global credit rating major Moody. This projection is lower than the Reserve Bank of India's (RBI) estimate of 8% for the same period, which was made at a recent policy meeting.
Gene Fang, The Managing Director of Moody's Investors Service Associate also pointed out that India's government debt is relatively high, standing at around 81.8% of the country's GDP for the fiscal year 2023. This is higher than the average of 56% for countries with a similar credit rating. There are concerns about the risk of fiscal slippage due to lower government revenues. Moody's projects growth rates of 6.1% and 6.3% for the fiscal years 2024 and 2025, respectively. They also expect a growth rate of 5.5% in the calendar year 2023.
On the contrary, the RBI has estimated India's economic
growth to be 6.5% in the fiscal year 2024. They predict growth rates of 8% in
the first quarter of fiscal year 2023, 6.5% in the second quarter, 6% in the
third quarter, and 5.7% in the fourth quarter of fiscal year 2023.
Despite the global economic outlook being less optimistic,
Moody's recognizes several positive aspects of India's credit rating.
India benefits from a stable domestic financing base for
government debt, has a large and diverse economy, a strong external position,
and high growth potential, according to Moody's.
It's worth noting that Moody's currently assigns a 'Baa3'
sovereign credit rating to India with a stable outlook.
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