Moody’s slashes India’s economic growth projections to 7% for 2022

The global slowdown and rising local interest rates would depress economic momentum, according to Moody’s, which reduced India’s GDP growth predictions for 2022 from 7.7% to 7% on Friday.

Moody’s Investors Service has now lowered its projections for India’s growth twice. It has reduced its estimates for the current year from an expected 8.8 percent in May to 7.7 percent as of September.

“For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent. The downward revision assumes higher inflation, high-interest rates and slowing global growth will dampen economic momentum by more than we had previously expected,” the agency said in its Global Macro Outlook 2023-24.

According to Moody’s, growth will slow to 4.8% in 2023 and then pick up to about 6.4% in 2024.

The report claimed that due to persistent inflation, tightening monetary policy, fiscal issues, geopolitical developments, and financial market volatility, the global economy is on the cusp of a slump.