Financial Services News

Moody’s pegs 2024 growth at 8%; higher than official 7.6% projection


Moody’s Investors Service on Thursday said India’s robust economic growth will continue and its real GDP growth will accelerate to around 8% in 2023-24 from 7% in 2022-23.

The global rating major’s growth estimate for this year is higher than the 7.6% uptick projected by the National Statistical Office (NSO) in its second advance national income estimates released on February 29.

On Wednesday, Reserve Bank of India Governor Shaktikanta Das said real GDP growth is likely to be closer to 8% as NSO’s current estimate of 5.9% GDP growth for Q4 of FY24 is likely to be overshot.

“We expect India to be the fastest-growing economy among major G20 countries. Government capital expenditure and strong domestic consumption will underpin India’s economic growth. Moreover, India is poised to benefit from increased global trade and investment opportunities arising from companies’ strategies to diversify away from China,” Moody’s Investors Service said in an outlook report on India’s banking sector.

The firm expects India’s inflation rate to decline to 5.5% in 2023-24 from a peak of 6.7% in 2022-23, and noted that further disinflation will support monetary policy easing, going forward.

Projecting a positive outlook for India’s banks, the rating agency said it expects the operating environment for banks to improve as government capital expenditure and robust domestic demand will support credit growth.

“Banks’ asset quality will continue to improve, along with the operating environment. At the same time, banks will continue to maintain sufficient levels of loan-loss reserves,” it said, even as it cautioned that unsecured retail loans could see higher impairments. Such loans, it noted, had grown rapidly in the last two years while interest rates have risen.

While strong government support would persist for banks “in times of need”, Moody’s Investors Service said though higher risk weights for exposures to non-banking finance companies and unsecured retail loans will slightly moderate banks’ key capital ratios, their overall capitalisation will remain strong, supported by internal capital generation and access to the equity market.


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