Moody projects India’s economy to grow at 6-6.3% in June quarter

New Delhi, June 12 (KNN) The Indian economy is likely to witness a 6-6.3 per cent growth in the June quarter, said Moody’s on Sunday.

The Credit Ratings agency flagged risks of fiscal slippage arising from weaker-than-expected government revenues in the current fiscal.

In comparison to the Reserve Bank of India’s (RBI) projection for the first quarter, Moody’s growth estimate is 8 per cent lower than that.

In an interview with PTI, Moody’s Investors Service Associate Managing Director Gene Fang said India has a relatively high level of general government debt at around 81.8 per cent of GDP for 2022-23, and low debt affordability.

India, he said, has a high growth potential and its credit strengths include a stable domestic financing base for government debt, as well as a sound external position.

“We expect India’s growth to come in around 6-6.3 per cent in the first quarter of the current fiscal year, which remains relatively flat from the 6.1 per cent recorded in the final quarter of fiscal 2022-23,” Fang said.

While household demand is likely to see an improvement given the moderation in both headline and core inflation readings, lagged effects of higher interest rates pose some risks on gross fixed capital formation, in particular, Fang added.

Fang said as a ‘Baa3’ rated sovereign, India’s strengths lie in its large and diversified economy with a high growth potential, which is evident in the relatively strong growth forecast this year despite the weaker global economic outlook.

For the full 2023-24 and 2024-25 fiscals, Moody’s projects economic growth at 6.1 per cent and 6.3 per cent, respectively.

On a calendar year basis, Moody’s expects growth to be 5.5 per cent in 2023, which could improve to 6.5 per cent in 2024.  (KNN Bureau)