“We expect India to be the fastest growing G-20 economy next year… (but) high inflation poses a downside risk to India’s growth as households and businesses have less purchasing power,” Guzman said at a virtual Moody’s event. ‘Sovereign deep dive’.
Moody’s earlier this month cut India’s growth projection for 2022 to 7% from 7.7% forecast earlier. He expects growth to slow to 4.8% in 2023 and then pick up to around 6.4% in 2024. India’s economy grew by 8.5% in 2021.
It predicted that GDP growth for G-20 economies would slow to 1.3% in 2023, significantly lower than its previous estimate of 2.1%. Guzman said further improvement in the fiscal situation and a faster-than-expected pace of fiscal consolidation leading to substantial debt reduction would result in positive pressure on India’s rating.