Moody's Sees Indian Economy in 'Sweet Spot' Amid Global Resilience

Moody's forecasts a robust 7.2% growth in India's GDP for 2024, with strong household consumption and investment driving momentum. Despite global challenges, India benefits from steady growth and moderating inflation. Yet, geopolitical tensions and volatile food prices continue to present inflationary risks, prompting cautious monetary policy.

Moody's Ratings has positioned the Indian economy as being in a 'sweet spot', projecting a 7.2% GDP growth for 2024 amidst a global landscape that continues to demonstrate resilience. The agency highlights robust household consumption and strong investment as key growth drivers.

The Global Macro Outlook report paints a picture of steady world economic growth despite a series of disruptions due to the pandemic, geopolitical tensions, and fluctuating policy landscapes. Moody's notes that India capitalizes on solid growth and controlled inflation compared to global peers.

Although inflation is currently above the Reserve Bank of India's target band, it is expected to moderate. Yet, ongoing geopolitical tensions and weather fluctuations pose risks. The RBI's cautious monetary approach reflects these dynamics, maintaining the repo rate amid robust growth prospects.

(With inputs from agencies.)