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Economists at the country's largest lender, SBI, today said they see India's Q2 real GDP growth slowing down further to 6.5% in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and whether it is slowing down, the analysts said they expect FY25 growth to come "closer to" 7%. SBI analysts join a long line of agencies like Fitch, ADB, IMF, Moody, World Bank, S&amp;P, and even RBI in forecasting India's GDP growth for FY25 in the range of 6.8% to 7.2% for FY25, driven by robust consumption and investment. SIP inflows have been at an all-time high, and so has QIP (qualified institutional placement) fundraising. As many as 71 companies raised Rs 88,678 crore this year through QIPs. Activity in Indian primary markets also remained robust, with 78 mainboard IPOs in 2024; this is a 111% rise from just 38 listings in FY23. Between April and June 2024, India's real GDP grew by 6.7%, the lowest growth seen in 15 quarters, pushing experts to believe that India is caught in a cycle of slowdown. "There is some incipient pressure evident on the domestic economy. Based on our analysis of 50 meaningful leading indicators (both consumption and demand-centric), a dip looks plausible across select cohorts of agriculture, industry, and services in Q2," the <keyword id="22337294" type="General" weightage="20" keywordseo="SBI-economists" source="keywords">SBI economists</keyword> added. Stating that they track 50 indicators to gauge economic activity, SBIs note said the proportion of indicators showing acceleration declined to 69% in Q2 FY25, as against 80% in Q2 FY24 and 78% in Q1 FY25. However, things might be changing now, given that rural demand has started looking up amidst muted urban demand. SBI also explained that the ongoing regulatory tightening on unsecured lending and roadblocks that are hindering rollover/refinancing of debt through unsecured credit are dismantling the unwarranted exuberance that had built up post-pandemic, especially in the urban areas. Madhu Lunawat, CIO &amp; Fund Manager, Bharat Value Fund states that the overall investment environment remains strong due to favorable economic conditions supporting government policies &amp; reforms. "The sustainable inflow from domestic investors is going to support the Indian equity market in any kind of correction. The long-term bullish structure of Indian economy will continue to attract new domestic &amp; global investors to participate in India’s growth story through various Investment avenues.” <h2>Rate cuts not on cards</h2>RBI Governor Shaktikanta Das clarified today that changing the monetary policy stance to 'neutral' does not mean a rate cut is imminent in the central bank's next policy announcement. Notably, RBI MPC is set to meet between December 4 and 6, 2024, to decide if the prevailing repo rate of 6.5%, which has stayed unchanged for the last 2 years, should be brought down or not. In its last meeting, The <keyword id="20501100" type="General" weightage="20" keywordseo="RBI-monetary-policy" source="keywords">RBI monetary policy</keyword> committee had shifted its stance to 'neutral' indicating that it is open to adjusting interest rates based on economic conditions. "It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn't mean that the next step is a rate cut in the very next meeting. It's not so," Das said. Das also cautioned that inflation remains a key factor, and inflation and CPI prints for October are expected to stay high.

SBI economists see Q2 GDP growth slowing down to 6.5%; FY25 growth to be closer to 7%

New Delhi [India], June 5 (ANI): The Bharatiya Janata Party (<keyword id="19894848" type="General" weightage="20" keywordseo="bjp" source="keywords">BJP</keyword>)-led National Democratic Alliance (<keyword id="19938590" type="General" weightage="20" keywordseo="NDA" source="keywords">NDA</keyword>) secured a majority in the general elections, securing a third term for Prime Minister Narendra Modi. This victory indicates continuity in policy, particularly in <keyword id="21785272" type="General" weightage="20" keywordseo="infrastructure-spending" source="keywords">infrastructure spending</keyword> and boosting domestic manufacturing, which are expected to support robust <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>. However, the NDA's slim margin of victory and the BJP's loss of an outright majority in parliament may slow down more extensive economic and fiscal reforms, potentially impeding <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword> efforts. In fiscal 2023-24, India's real GDP accelerated to 8.2 per cent from 7.0 per cent the previous year, driven by significant gains in gross fixed capital formation as the government's infrastructure programs gained momentum, even as private consumption remained subdued. <keyword id="20227907" type="General" weightage="20" keywordseo="Moodys" source="keywords" meta.keywordsubtype="org" meta.entityname="Moody's" meta.hostid="261" meta.entityid="Moody's">Moody's</keyword> projects India's economic strength to continue, with an anticipated real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of around 7 per cent over the three-year period from fiscal 2023-24 to 2025-26. This growth is expected to benefit from ongoing infrastructure development and digitalization efforts. Despite this outlook, structural weaknesses pose risks to long-term growth potential. High youth unemployment and low productivity growth in the agriculture sector constrain economic expansion. The agricultural sector's modernization has been stalled by political challenges, as evidenced by the repeal of key reforms in 2021 following widespread farmer protests. Additionally, gains in manufacturing have been uneven, limiting labour force diversification away from agriculture, which still accounts for 40 per cent of total employment. Foreign direct investment (FDI) inflows have declined over the past three years, despite a favourable geopolitical climate amid US-China tensions. This trend suggests persistent constraints within India's investment climate. To address these challenges, further structural reforms and enhanced implementation of existing initiatives, such as the production-linked incentive schemes to promote manufacturing, calibrated liberalisation of cross-border trade, and reconsideration of labour reforms, are necessary. The government's focus on fiscal consolidation is expected to continue, but significant improvements in debt ratios and interest servicing have yet to be realised. Since the trough in fiscal 2020-21, the central government's deficit has likely narrowed for three consecutive years. The interim budget for fiscal 2024-25 projects a deficit of around 5 per cent of GDP, aiming for a 4.5 per cent deficit by fiscal 2025-26. However, India's fiscal consolidation post-pandemic has not outpaced other emerging markets in Asia-Pacific, and its fiscal and debt metrics remain weaker than those of Indonesia, the Philippines, Thailand, and other Baa-rated peers globally. India's general government debt is projected to stabilise above 80 per cent of GDP over the next three years, compared to 70.5 per cent in fiscal 2018-19. General government interest payments are forecast to fall to around 24 per cent of general government revenue over the next two years, down from over 28 per cent in fiscal 2020-21, but still higher than the pre-pandemic ratio of less than 23 per cent. While increased budgetary allocations for infrastructure indicate an improvement in spending quality, debt servicing remains a significant portion of expenditure, reflecting ongoing constraints on fiscal flexibility. This situation underscores the need for the incoming government to balance fiscal consolidation with growth-supportive measures. The upcoming final budget for the fiscal year ending March 2025 will provide further insights into India's fiscal policy direction through 2029. As the Modi administration embarks on its third term, the focus will likely remain on sustaining economic growth while addressing the persistent <keyword id="21500054" type="General" weightage="20" keywordseo="fiscal-challenges" source="keywords">fiscal challenges</keyword> that hinder India's long-term economic potential.

Modi 3.0 will offer policy continuity, but BJP's loss of outright majority may slow down fiscal reforms: Moody's

New Delhi, Global rating agency Moody's has raised India's growth forecast to 6.7 per cent from 5.5 per cent for 2023. At the same time though, it has lowered the <keyword id="35050" type="General" weightage="20" keywordseo="GDP" source="Orion">GDP</keyword> forecast for 2024 from 6.5 per cent to 6.1 per cent. "Since the second quarter out performance creates a high base in 2023, we have lowered our 2024 growth forecast from 6.5 percent to 6.1 per cent. Given the robust underlying economic momentum, we also recognise further upside risk to India's economic growth performance," it said on Friday. Moody's 6.7 per cent growth forecast for 2023 is slightly higher than RBI's projection of 6.5 per cent for 2023-24. India has recorded a growth of 7.8 per cent in the first quarter of the current fiscal, which was lower than RBI's projection of 8 per cent for the April-June period of 2023-24.

Moody's raises India's GDP forecast to 6.7% for 2023

<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword> [<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>], March 11 (ANI): Global rating agency Moody's expects India's economic growth in 2024-25 growth above that of other emerging market G20 peers, given its domestic demand managed to sustain momentum. India's real GDP growth accelerated to 8.4 per cent year over year in the October-December quarter of 2023, up from upwardly revised prints of 8.1 per cent in July-September and 8.2 per cent in April-June. The global rating agency Moody's attributed India's firm growth primarily to solid capital expenditure, defying private consumption which remained "sluggish" amid still-weak rural demand. On the supply side, an 11.6 per cent surge in manufacturing output and strong service sector activity more than offset a decline in agricultural output in India, it said. Even so, it said high-frequency indicators, including expanding <keyword id="20905252" type="General" weightage="20" keywordseo="purchasing-managers" source="keywords">Purchasing Managers</keyword>' Index (PMI), rising auto sales, consumer optimism and double-digit credit growth, suggest that the economy's strong October-December momentum carried into January-March this year. "Some of the large emerging market (EMs) countries stood out in 2023 for their resilient economies amid high-interest rates, exchange rate volatility, subdued capital flows and muted external demand. This year, we expect growth to slow across several major EMs as the economies transition to a post-pandemic steady growth path," Moody's said in its Macro Monday report, chaptered 'G-20 emerging markets are poised for growth stabilization'. In its recently published <keyword id="20905253" type="General" weightage="20" keywordseo="global-macro-outlook" source="keywords">Global Macro Outlook</keyword>, it forecasted G20 emerging market growth to stabilize around 4.0 per cent in 2024 and 2025, down from 4.7 per cent in 2023 as global monetary policy gradually normalises. On an annual basis, domestic demand was the primary engine of growth in several G20 emerging markets. "We believe growth cycles in India and Indonesia are at their peak, Brazil and Mexico are likely past their peak, and <keyword id="19899437" type="General" weightage="20" keywordseo="south-africa" source="keywords">South Africa</keyword>'s growth has likely troughed. Nevertheless, we expect relatively stable growth at close to potential in 2024 and 2025 for most G-20 EMs." On the policy side, the rating agency expects continuity after the general election in April-May and continued focus on infrastructure development. It forecasts India's real GDP to grow about 6.8 per cent in 2024 and 6.4 per cent in 2025, from 7.7 per cent in 2023. India's GDP grew at a massive 8.4 per cent during the October-December quarter of the current financial year 2023-24 and the country continued to remain the fastest-growing major economy. The Indian economy grew 7.8 per cent and 7.6 per cent during the preceding two quarters - April-June and July-September. The strength of domestic demand has driven the economy to a 7 per cent plus growth rate in the last three years. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively. In the next three years, India is expected to become the third-largest economy in the world, with a GDP of USD 5 trillion. India can aspire to become a USD 7 trillion economy in the next six to seven years (by 2030), India's finance ministry recently asserted. (ANI)

Domestic demand to keep India's growth above other G20 emerging markets: Moody's

Moody's Analytics on Tuesday said <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>'s domestic economy, rather than trade, is its primary engine of growth and the slowdown in economic activity late last year will only be temporary. The government data released last week showed India's gross domestic product (GDP) growth slowed to a three-quarter low of 4.4 per cent in October-December,2022, mainly due to a contraction in manufacturing and low private consumption expenditure. While the manufacturing sector contracted by 1.1 per cent, private consumption expenditure slowed to 2.1 per cent in the October-December quarter of the current fiscal. In its report on emerging market outlook, Moody's Analytics said growth slowed substantially on a year-ago basis, with private consumption lagging overall GDP for the first time since the <keyword id="6383835" type="General" weightage="50" keywordseo="delta" source="Orion">Delta</keyword> wave of Covid-19 struck the economy in the second quarter of 2021. "Our take is that the slowdown late last year will be temporary and even salutary, helping to wring some of the demand-side pressures out of the economy without stopping it wholesale. On the external front, better growth in the US and <keyword id="28249" type="General" weightage="50" keywordseo="europe" source="Orion">Europe</keyword>'s incipient recovery will propel India at the mid-year mark," it said. The US and Europe are India's largest trade partners and are important destinations for exports of business services. The slowdown in GDP growth in the December quarter was stark when compared to 11.2 per cent growth in the same quarter of last fiscal. In the current fiscal, the economy grew 13.2 per cent in the April-June quarter and 6.3 per cent in the July-September quarter. Moody's Analytics said India's domestic economy, rather than trade, is its primary engine, in contrast to most other emerging-Asia economies. "With this in mind we observe India's fourth-quarter performance with caution," it said. Sectors such as manufacturing and agriculture that are highly linked to private consumption spending either contracted or barely grew during the December quarter of the current fiscal. The normally faster-growing construction and retail and wholesale trade sectors came in somewhat hotter, though both lagged gains from earlier this year. "While high-interest rates have slowed the domestic economy and curbed imports, external imbalances have widened, putting pressure on the rupee and adding to inflation," Moody's Analytics noted. In the current fiscal (2022-23), the GDP is projected to grow by 7 per cent as per official estimates. This would require about a 5 per cent GDP expansion in the fourth (January-March) quarter. In 2021-22 the economy grew 9.1 per cent. In 2020-21 (The covid-impacted year), the economy contracted 5.8 per cent, while in 2019-20 the growth was 3.9 per cent. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/silicon-gold-and-copper-could-help-fight-covid-19-says-an-australian-study/articleshow/98475233.cms">Silicon, gold and copper could help fight Covid-19 says an Australian study</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/from-raazi-to-mardaani-all-the-times-a-woman-shouldered-a-bollywood-film-to-success/slidelist/98452356.cms">From Raazi to Mardaani: All the times a woman shouldered a Bollywood film to success</a>

Slowdown in GDP growth late last year temporary: Moody's Analytics

<ul><li>There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30, said SBI Ecowrap. </li><li>On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>shared that it now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. </li><li>India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per <keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword>. </li></ul>SBI Ecowrap has pegged India’s GDP growth rate for Q2 FY23 at 5.8%, much lower than the RBI’s estimate of 6.3%. The research report which was released late Monday, also said that this growth is shrouded in significant uncertainties. “There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30. Consensus estimates are at 6.1%. A range of 5.6%-6% is better than a point estimate,” the report said, which is using a new model to predict how the economy is growing, with a lag. As per its estimates of Q2 growth, its fiscal year growth estimates too stand at 6.8%, as compared to the popular consensus of 7%. “Overall, a sub 6% growth if it materialises in Q2, could imply that India is likely to have expanded at lower than the 7% benchmark. We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap. SBI’s commentary is in contrast to ICRA’s Q2 growth predictions that came on November 21, which pegs Q2 growth at 6.5% – half of the growth seen in Q1, but also ahead of RBI estimates. While the first quarter of FY23 exhibited double digit growth at 13.5%, it had missed estimates, sending many agencies to recalibrate their projections of the year. Apart from SBI and Citibank, RBI too had changed its annual growth estimates - leading many agencies to follow suit. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Giving an early view of India’s pace of growth is export data. Hit by a global slowdown, Indian exports for the month of October shrunk by 16.6% to $29.78 billion as compared to last year, according to the Commerce Ministry. Imports grew by 5.5%, widening India’s trade deficit. Goldman Sachs believes 2023 will be tougher Goldman Sachs, which provides estimates for calendar years as opposed to fiscal years, which believes the pace of growth will slowdown in 2023. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per Goldman Sachs. “Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up,” said Goldman Sachs per a <a href="https://economictimes.indiatimes.com/news/economy/indicators/goldman-sachs-slashes-indias-gdp-forecast-for-2023-to-5-9/articleshow/95651040.cms">Bloomberg report</a>. Goldman Sachs expects the <keyword id="11929899" type="General" weightage="20" keywordseo="global-economy" source="Orion">global economy</keyword> to grow at 1.8%, as US resilience contrasts with a European recession, and a bumpy reopening in China. “Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war,” said a redacted version of Goldman Sachs report on November 16. In the second week of November, Moody’s too cut its <keyword id="162607" type="General" weightage="20" keywordseo="india-gdp-growth" source="Orion">India GDP growth</keyword> forecast for 2022 to 7% from its earlier estimates of 7.7%. The <a href="https://economictimes.indiatimes.com/news/economy/indicators/moodys-cuts-2022-growth-forecast-for-india-to-7/articleshow/95445091.cms">rating agency has cited rising inflation</a> coupled with high interest rates and a slowing global economy as the reasons behind the same. However, Moody’s pegged India’s GDP growth rate at 4.8% for 2023 – much lower than that of Goldman Sachs’ report. SEE ALSO <a href="https://www.businessinsider.in/india/news/exports-shrink-by-16-6-to-29-78-bn-in-oct/articleshow/95532058.cms">Exports shrink by 16.6% to $29.78 bn in Oct</a> <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">S&amp;P cuts India's growth forecast to 7% for FY23</a>

You Searched For "Moody s India GDP" and got 6 results

SBI economists see Q2 GDP growth slowing down to 6.5%; FY25 growth to be closer to 7%

BI India Bureau

Modi 3.0 will offer policy continuity, but BJP's loss of outright majority may slow down fiscal reforms: Moody's

ANI

Moody's raises India's GDP forecast to 6.7% for 2023

IANS

Domestic demand to keep India's growth above other G20 emerging markets: Moody's

ANI

Slowdown in GDP growth late last year temporary: Moody's Analytics

PTI

No end to downgrades in GDP estimates as economists remain divided on severity of slowdown

Katya Naidu

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