Moody's ups growth projections for India, US, China, euro area, Russia

01 Mar '23

2 min read

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Moody's Investor Service recently raised its 2023 growth projections for India, the United States, the euro area, China, Mexico, Russia, Saudi Arabia and Turkiye. The credit rating agency, which published its macro-outlook for G20 economies, expects India's real gross domestic product (GDP) growth to be 5.5 per cent this year—up from the earlier projection of 5 per cent—and to be 6.5 per cent in 2024.

Moody's projects growth to moderate to 2 per cent in 2023 for G20 economies, from 2.7 per cent in 2022, and then to improve to 2.4 per cent in 2024. For advanced economies of the G20, the growth estimate for 2022 is now 2.3 per cent, up from the earlier expectation of 2.1 per cent.

The rating agency said a significant rise in capital expenditure budget allocation of India for fiscal 2023-24 is also expected: ₹10 lakh crore (3.3 per cent of GDP), up from ₹7.5 lakh crore for the fiscal 2022-23.

Economic momentum in many large emerging market economies , including India, Brazil, Mexico and Turkiye, had proved more resilient to last year's tightening in the global and domestic financial environment than the agency had anticipated, it said.

An eventual let-up in monetary policy tightening in the United States will help stabilise, if not improve, capital flows to emerging market countries, it noted. Emerging markets will, however, be vulnerable to bouts of heightened financial market volatility until inflation in advanced economies is firmly in check.

Inflation will continue to reduce, but a persistent drop to central bank targets is not assured, Moody’s added.

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