Moody’s cuts India’s growth forecast to 9.1% in 2022
Highlight
- Moody’s cuts India’s growth forecast for the current year to 9.1% from 9.5%
- It said the higher fuel and fertilizer import bill could limit the government’s capital expenditure
- It said that Russia’s invasion of Ukraine’s creation would hurt economic growth.
Moody’s on Thursday cut India’s growth forecast for the current year to 9.1 per cent from 9.5 per cent, saying a higher fuel and fertilizer import bill could limit the government’s capital expenditure.
In its Global Macro Outlook 2022-23 (March 2022 update) titled: Economic growth will be hit by Russia’s invasion of Ukraine, the rating agency said India’s growth is likely to be 5.4 per cent in 2023.
It said India is particularly sensitive to high oil prices, given that it is a major importer of crude. Since India is a surplus producer of cereals, agricultural exports will benefit in the short run from higher prevailing prices.
“High fuel and potential fertilizer costs down the road weigh on government finances, potentially limiting planned capital expenditures.
“For all these reasons, we have lowered our 2022 growth projections for India by 0.4 per cent. We now expect the economy to grow by 9.1 per cent this year,” Moody’s Investors Service said.
It said the forecast revision is also a factor in the somewhat stronger underlying momentum, which the agency had not previously accounted for.