Moody’s Analytics raises India’s 2024 GDP forecast to 7.1%; economy likely to grow 6.5% in 2025

“After a strong post-pandemic rebound of 7.8% in 2023, Indian GDP growth will slow to 7.1% in 2024 and 6.5% in 2025,” Moody’s Analytics said.

The firm predicted better inflation outcomes as well, as it reduced India’s inflation forecast to 4.7 percent from the 5 percent projected earlier.

India’s inflation remained below 4 percent in July and August as a favourable base kept prices contained.

The 2025 and 2026 forecast was unchanged at 4.5 percent and 4.1 percent, respectively.

The Reserve Bank of India expects inflation to decline to 4.5 percent in FY25.

A Moneycontrol poll had projected that the central bank is unlikely to move on rates in the upcoming meeting, and the first cut of 25 bps is likely to follow in December.

RBI’s US counterpart, the Federal Reserve, had recently cut the policy rate by 50 bps to stave off recession fears.

For the APAC region, Moody’s raised 2025 forecast to 4 percent from 3.9 percent projected earlier. The APAC economies are expected to log 3.9 percent growth in 2024, it said.

“Exports have been a key driver for the region, but growth rests on an unstable footing. Key export drivers such as chips are losing steam. Global goods demand has been soft. And China's policy-led ramp-up in exports has sparked protectionism abroad,” Moody’s said.

It noted that China is expected to slow more than anticipated to 4.7 percent, compared with the projected 4.9 percent earlier.

China’s central bank released a host of measures to boost the economy on September 24.