Moody's Investors Service has raised growth forecast for India to 9.5 per cent for the calendar year 2022 from 7 per cent and maintained its forecast for 5.5 per cent growth in 2023. It added that this translates into 8.4 per cent and 6.5 per cent in fiscal years 2022-23 and 2023-24, respectively. Though, it highlighted high oil prices and supply distortions as a drag on growth.
It noted that Indian economy is estimated to grow at 9.2 per cent in the current fiscal ending March 31. It added that the speed of the recovery from the first lockdown-led contraction in the June quarter of 2020 and subsequently in the June quarter of 2021 during the Delta wave was stronger than expected. It said ‘the economy is estimated to have surpassed the pre-COVID level of GDP by more than 5 per cent in the last quarter of 2021. Sales tax collection, retail activity and PMIs suggest solid momentum’.
Moody's said as is the case in many other countries, the recovery is lagging in contact-intensive services sectors, but it should pick up as the Omicron wave subsides. With most remaining restrictions now being lifted with the improvement in the COVID situation, including the reopening of schools and colleges for in-person instruction across various states, the country is on its way to normalcy.
