Moody’s maintained its GDP growth forecast for India at 6.8% for 2024, with a slight moderation to 6.5% expected in 2025. The agency attributed this outlook to strong domestic and international demand, supporting growth across emerging markets (EM) with varying trajectories.
In its March Global Macro Outlook 2024-25, Moody’s upgraded India’s growth projection from 6.1% to 6.8% for 2024, citing robust manufacturing and increased infrastructure spending as key drivers. India is anticipated to lead in growth among G-20 economies during this period.
GDP for FY24 expanded by 8.2%, driven by notable growth in manufacturing, construction, mining, and services. Moody’s noted a moderation in headline inflation in India, primarily due to lower food prices, although volatility remains a concern. Inflation is projected to ease to 5.2% in 2024 and further to 4.8% in 2025, down from 5.7% in 2023.
Regarding monetary policy, Moody’s expects the Reserve Bank of India (RBI) to maintain the current interest rates amidst challenges in achieving the 4% inflation target. During its June policy meeting, the RBI held the benchmark interest rate (repo rate) steady at 6.5%, reflecting a cautious approach to managing inflationary pressures. While overall inflation has moderated below 5% since March, persistent elevated food prices continue to pose ongoing challenges to economic stability and policy decisions.
