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The rating agency said that increasing interest rates, uneven distribution of monsoons and a slump in global growth can impact the Indian economy on a sequential basis
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India's gross domestic product (GDP) growth is likely to slow down from 8.3 per cent in 2021 to 7.7 per cent in 2022 and decelerate further to 5.2 per cent in 2023, according to Moody's Investors Service.
Earlier in March, Moody's had estimated that India's economy could expand by 8.8 per cent in 2022.
As per the data, the Indian economy grew 13.5 per cent from a year ago in the April-June quarter. However, economists stated that growth is likely to lose momentum in coming quarters amid high-interest rates and a global slowdown.
The State Bank of India (SBI) in a report said that it expects an upside to RBI GDP projections at 7.2 per cent for FY23. The significantly high base of FY22 and the low base of FY21 has made the forecasting exercise a difficult one, with a large band around the mean estimates.
The Reserve Bank of India (RBI) raised the key policy repo rate by 50 basis points last month, the third increase in as many months to cool stubbornly high inflation.
The rating agency said that increasing interest rates, uneven distribution of monsoons and a slump in global growth can impact the Indian economy on a sequential basis.
Moody's also said that inflation is a big challenge with the RBI adjusting growth and inflation, while likewise containing the effect of imported inflation from the year-to-date devaluation of the Indian rupee against the US dollar of around 7 per cent.