In its latest report, Moody’s stated, “We expect India’s economy to grow by 7% in FY 2024 (year to March 2025), down slightly from 8.2% the previous year. However, the robust economy will continue to drive premium growth.”
India’s GDP per capita at purchasing power parity increased by 11% year-on-year to $10,233 in FY 2023, as per the report.
The downgrade follows a similar revision by the Federation of Indian Chambers of Commerce and Industry (FICCI). Last Thursday, FICCI reduced its GDP growth estimate for FY 2024-25 to 6.4% from the earlier projection of 7%. The Economic Outlook Survey by FICCI noted, “The numbers align with expectations and reflect a notable slowdown compared to 8.2% GDP growth recorded in 2023-24.”
Adding to the trend, the Asian Development Bank (ADB) had also revised India’s GDP growth projections in December. ADB lowered its forecast for FY 2024 to 6.5%, citing weaker industrial growth and slower government spending. It further revised its projection for FY 2025-26 to 7% from the earlier 7.2%, attributing the downgrade to subdued private investment and the effects of tight monetary policies on housing demand.
“The forecast for FY2025 has been reduced slightly due to lower-than-expected growth in private investment and housing demand, impacted by tight monetary policy aimed at combating inflation,” ADB stated in its outlook. India’s economic trajectory continues to face challenges from geopolitical uncertainties affecting supply chains and adverse weather conditions, further complicating recovery efforts.
