Moody's Ratings cuts India's GDP 2025 forecast to 6.3% from 6.5%

Geopolitical stresses like India-Pakistan tension also have a potential downside risk to Moody’s baseline growth forecasts, the rating agency said in its Global Macro Outlook 2025-26 (May update).

Costs to investors and businesses are likely to rise as they factor in new geopolitical configurations when deciding where to invest, expand and source goods, it was cited as saying by domestic media reports.

Moody's expects the Reserve Bank of India to lower benchmark policy rates further to support growth.

Policy uncertainty is likely to take a toll on consumer, business and financial activity in India, and dampen global trade and investment with consequences across the G-20, it observed.

Moody's Ratings lowered GDP growth projections for the United States to 1 per cent this year and 1.5 per cent in the next from 2 per cent and 1.8 per cent earlier respectively. That compares with a growth of 2.8 per cent last year.

For China, it expects growth to be 3.8 per cent this year and 3.9 per cent in the next, lower than 5 per cent in 2024.

Fibre2Fashion News Desk (DS)