Moody's Lowers Global Growth Projections Amid Policy Uncertainty

Moody's Ratings has reduced India's GDP growth forecasts for 2025 to 6.3% from 6.5%, citing global trade uncertainty and geopolitical tensions. The outlook for other major economies like the US and China was also downgraded. Financial market volatility adds further risks to global economic resilience.

Moody's Ratings on Tuesday revised its projections for India's GDP growth in 2025, downgrading it to 6.3% from a previous estimate of 6.5%. The agency attributed this decline to global economic uncertainties stemming from heightened US policy unpredictability and escalating trade restrictions.

In its latest Global Macro Outlook, Moody's highlighted various geopolitical tensions, such as India-Pakistan conflicts, which threaten to exacerbate downside risks to economic growth. The complexities introduced by these tensions are expected to raise costs for businesses and investors as they navigate new geopolitical landscapes to make investment-related decisions.

The agency has maintained its forecast for India's GDP growth at 6.5% for 2026 but anticipates reduced growth in both the US and China in the coming years. Moody's also predicts ongoing financial market volatility and political tensions to further impact global growth prospects.

(With inputs from agencies.)