Moody's raised India's GDP growth forecast to 6.8% for 2024, gave this reason

Global rating agency Moody's on Monday raised India's growth forecast for calendar year 2024 to 6.8 per cent from the earlier estimate of 6.1 per cent, given 'stronger than expected' economic data for 2023 and adverse economic conditions globally.

India's real GDP expanded by 8.4% year-on-year in the fourth quarter of calendar year 2023, resulting in a GDP growth of 7.7% for the full year 2023.

Moody's Investors Service said government capital spending and strong manufacturing activity have contributed meaningfully to strong growth results in 2023. Due to this, there is an increase in GDP figures.

Moody's has said that with global challenges easing, the Indian economy may comfortably be able to register 6-7 per cent real GDP growth. "India's economy has performed well and we raised our 2024 growth forecast to 6.8% from 6.1% following stronger-than-expected data in 2023," Moody's said.
 
"India is projected to remain the fastest growing among the G-20 economies," Moody's said in its global macroeconomic outlook for 2024. For 2025, GDP growth is projected at 6.4%."

"Strong goods and services tax collections, uptick in vehicle sales, consumer sentiment and double-digit credit growth suggest urban consumption demand remains resilient," Moody's said in its report. On the supply side, Moody's said expansion of manufacturing and services PMIs offset solid economic momentum.