Keeping in view strong domestic consumption and government capital expenditure, Moody's Ratings last week raised India's gross domestic product (GDP) growth forecast for fiscal 2023-24 (FY24) by about 140 basis points to around 8 per cent from 6.6 per cent in November last year.

The country’s National Statistical Office (NSO) projected 8.4 per cent growth in the third quarter (Q3) of FY24. It also revised GDP estimates for Q1 and Q2 to 8.2 per cent and 8.1 per cent from 7.8 per cent and 7.6 per cent respectively.

India’s real GDP growth was 7 per cent in FY23.

India will also benefit from increased global trade and investment opportunities when companies diversify away from China, Moody’s noted.

"We expect India's inflation rate will decline to 5.5 per cent in [fiscal] 2023-24 from a peak of 6.7 per cent in fiscal 2022-23, and further disinflation will support monetary easing going forward," it said.

Banks' capitalisation will stay strong as their internal capital generation keeps pace with capital consumption, it said. They will also be able to raise capital easily if needed, given India's buoyant equity market.

Fibre2Fashion News Desk (DS)

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Moody's raises India's FY24 GDP growth forecast to around 8% from 6.6%

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