Moody's raises India's growth forecast to 9.5% for 2022

American credit rating agency, Moody's Investors Service has raised India's growth forecast to 9.5 per cent from 7 per cent for the calendar year 2022.

The agency has revised its growth projection for India citing a stronger-than-expected economic recovery from the national lockdown of 2020 and the second wave of the COVID-19 pandemic in mid-2021.

Moody's said in a statement that they have raised the 2022 calendar year growth forecasts for India and maintained the forecast for 5.5 per cent growth in 2023. This translates into 8.4 per cent growth in the fiscal year 2022-23 and 6.5 per cent growth in the fiscal year 2023-24. However, it flagged high oil prices and supply distortions as a drag on growth.

It said, the Indian economy is estimated to have surpassed the pre-COVID level of GDP by more than 5 per cent in the last quarter of 2021 and added that sales tax collection, retail activity and PMIs suggest solid momentum.

The Agency said, the 2022 Budget prioritised growth, with a 36 per cent increase in allocation to capital expenditure to 2.9 per cent of GDP for the fiscal year 2022-23. It said, with the RBI leaving interest rates unchanged at its February meeting, monetary policy remains supportive.