New Delhi: Moody’s Ratings has raised its forecast for India’s GDP growth for 2024 to 7.2 percent from 6.8 percent as projected earlier, on the back of stronger private consumption driving up aggregate demand in the economy.
"Household consumption is poised to grow as headline inflation eases toward the RBI’s target. Indeed, signs of a revival in rural demand are already emerging on the back of improving prospects for agricultural output amid above-normal rainfall during the monsoon season," the global rating agency said.
"These forecast changes assume strong broad-based growth and we recognise potentially higher forecasts if the cyclical momentum, especially for private consumption, gains more traction," Moody's said.
Moody’s upgraded forecast matches the RBI projection of 7.2 percent growth for the Indian economy for 2024-25, which factors in rising rural and urban demand as a driver of growth. The RBI, in its growth projection, had cited the pick-up in the monsoon which would lead to stronger growth in the farm sector, and higher rural income as a factor that would drive up the growth rate.
Moody’s also cited strong performances in the industrial and services sector, indicated by the Purchasing Managers' Index, as an indicator of higher growth momentum. The Indian economy is expected to grow faster at 6.6 percent in 2025 as well, compared to the 6.4 percent growth projected earlier, Moody’s said.
