In the second quarter of 2024, India’s real GDP expanded 6.7% year-over-year, fueled by a resurgence in household consumption, increased investment, and solid manufacturing activity.
Representative Picture (IANS)
Rating agency Moody’s on Friday forecast 7.2% GDP growth in the 2024 calendar year and 6.6% in the next.
It said the Indian economy is in a sweet spot, with a mix of solid growth and moderating inflation.
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In the second quarter of 2024, India’s real GDP expanded 6.7% year-over-year, fueled by a resurgence in household consumption, increased investment, and solid manufacturing activity.
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In its Global Macro Outlook 2025-26, Moody’s said the global economy has shown remarkable resilience in bouncing back from supply chain disruptions during the pandemic, an energy and food crisis after the Russia-Ukraine war began, high inflation, and consequent monetary policy tightening.
“Most G-20 economies will experience steady growth and continue to benefit from policy easing and supportive commodity prices,” it added.
Moody’s highlighted that household spending is expected to remain strong, buoyed by festive season purchases and rising rural demand as agriculture rebounds. Private investment- one of the key factors impacting GDP- is likely to be supported by increasing capacity utilization, strong business sentiment, and the government’s ongoing infrastructure investments.
India’s solid economic fundamentals, like healthy corporate and bank balance sheets, a resilient external position, and robust foreign exchange reserves, bolster the outlook, it said.
It said the food price volatility remains a concern, as headline inflation recently surged to 6.2% in October due to a spike in vegetable prices, surpassing the Reserve Bank of India’s (RBI) tolerance band of 4% (+/-2%).
The report suggested that inflation will moderate in the months ahead, aided by higher sowing and ample grain reserves.
Yet, the RBI is expected to maintain its cautious stance, keeping interest rates relatively steady given persistent inflationary risks from global tensions and weather uncertainties, it said.
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