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Now a wonderful news has come from across the seven seas for the Indian economy, which is running at the fastest speed in the world. In fact, global rating agency Moody’s has drastically increased India’s growth rate forecast for 2024. According to the latest estimate of Moody’s, India’s GDP growth rate may be 6.8 percent in the calendar year 2024. Earlier, the rating agency had estimated a growth rate of 6.1 percent for this year.
Moody’s has made this estimate after better than expected data for the October-December quarter came out. After the wonders of this quarter on the economy front, India’s growth rate in the calendar year 2023 has been 7.7 percent. India’s growth rate in the fourth quarter was 8.4 percent.
Strong pace amid global slowdown!
According to Moody’s Investors Service, increasing government spending on capital expenditure and strong manufacturing growth have taken India’s growth rate to this high in 2023. This pace of India is also being considered commendable because last year, the global conditions ranging from global economic slowdown to geo-political tension were not favorable for growth. According to Moody’s, after this performance of India in poor conditions, India’s economic strength may become stronger this year amidst the improving global conditions. In such a situation, it will not be difficult for India to achieve a growth rate of 6-7 percent this year.
India will grow fastest in G-20
Moody’s has expressed confidence that India will remain the fastest growing economy among the G-20 countries. Moody’s has estimated India’s GDP growth to be 6.4 percent in 2025. The rating agency has said that economic indicators are showing that the strong momentum of July-September and October-December quarters continues in the January-March quarter of 2024 as well.
Moody’s has said that strong GST collection, increasing vehicle sales, consumer confidence and double digit credit growth are indicating strength in urban demand. At the same time, the increase in PMI of manufacturing and service sectors is evidence of solid economic growth. Along with this, the way the government has set a target of spending Rs 11.1 lakh crore i.e. equivalent to 3.4 percent of GDP for capital expenditure in the interim budget, there is hope that this pace will continue at an even faster pace. Capital expenditure is 16.9 percent higher than the estimate for 2023-24.
Stable government will become the reason for superfast speed
Moody’s has expressed hope that after the elections, a stable government will be formed in the country and continuity in policy matters will continue. At the same time, the rating agency is confident that the government will continue to spend heavily on the infrastructure sector also. But Moody’s has termed the slow pace of private investment as a cause for concern. However, the rating agency has predicted that India will benefit from the ongoing exercise on diversification of supply chains across the world.
Apart from this, PLI schemes are also expected to increase the interest of investors in India. Elections are going to be held in many G-20 countries like India, Indonesia, Mexico, South Africa, Britain and America in 2024. Moody’s said that the impact of the election results is visible not only within the country’s borders but also outside. According to Moody’s, the impact of the leaders elected in these elections will be clearly visible on domestic and foreign policies during the next four to five years.
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