- Moody’s downgraded India’s growth forecast for the current year from 9.5% to 9.1%
- It said higher energy and fertilizer import bills could limit the government’s capital expenditure
- It says Russia’s aggression in Ukraine will hurt economic growth
Moody’s on Thursday slashed India’s growth forecast for the current year to 9.1 per cent, from the previous 9.5 per cent, a higher energy and fertilizer import bill could limit the government’s capital expenditure.
Its Global Macro Outlook 2022-23 (March 2022 Update) headlined: Russia’s attack on Ukraine builds will hurt economic growth, rating agency says India’s growth could reach 5.4 percent in 2023.
It says India is particularly vulnerable to high oil prices because it is a major importer of crude oil. Since India is a surplus producer of grain, agricultural exports will benefit in the short run from higher conventional prices.
“High fuel and potential fertilizer costs will weigh on government funding down the road, limiting potential planned capital expenditures.
“For all these reasons, we have lowered our growth forecast for India by 0.22 percentage points by 2022. We now expect the economy to grow 9.1 percent this year,” said Moody’s Investors Service.
It said the forecast corrections also factor into the agency’s somewhat stronger underlying momentum than previously thought.
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