India’s economy will pick up speed soon, many major challenges have been overcome – Moody’s

Moody’s India GDP Forecast: After a few months of relief, the Indian economy data in the December quarter raised concerns again. According to government data, India’s GDP growth rate during this period was the lowest in three quarters. However, rating agency Moody’s Analytics believes that this slowdown in GDP growth is temporary and India’s economy will soon pick up again.

Decline in the quarter

The government released the official figures of the economy last week. According to statistics, during the third quarter of the current financial year i.e. October to December 2022, India’s economic growth rate was only 4.4 percent. This was the lowest pace of growth of the economy in three quarters. The main reasons for the decline in the GDP growth rate were the slowdown in manufacturing and the decline in private consumption and spending. The manufacturing sector contracted 1.1 per cent during the December quarter.

This is the engine of GDP growth

Moody’s has discussed India’s growth rate in its recent report on emerging markets outlook. Moody’s says that the decrease in GDP growth rate at the end of last year is temporary. This softening is helping to relieve demand side pressures. Moody’s says that right now the domestic economy is working as the engine for the growth rate and there is scope for improvement.

Will get help from outside

Looking at external factors, a favorable picture is emerging for India here too. Good recovery is happening in America and Europe, which is helpful for India’s growth rate. America and Europe are among the biggest trading partners of India. Looking at all these factors, it seems that the slowdown in the economic growth rate during the December quarter is not going to last for long.

This is the estimate for the whole financial year

If you look at the official estimate, India’s economy can grow at the rate of 7 percent in the current financial year. However, the softening of the December quarter has made this estimate a bit difficult. If the economy manages to achieve a growth rate of 5 percent during the last quarter of the current financial year i.e. January to March 2023, then it will be possible to achieve the official estimate for the entire financial year.

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