Credit rating agency, Moody's Investors Service in its update to Global Macro Outlook 2022-23 has lowered India's economic growth projection to 8.8 per cent for 2022 from 9.1 per cent earlier, citing high inflation. The rating agency however maintained its 2023 growth forecasts at 5.4 per cent.
As per the report, high-frequency data suggests that the growth momentum from December quarter 2021 carried through into the first four months this year. However, the rise in crude oil, food and fertilizer prices will weigh on household finances and spending in the months ahead.
The agency further noted that rate hike to prevent energy and food inflation from becoming more generalized will slow the demand recovery's momentum. Besides, Moody's said that but unless global crude oil and food prices rise further, the economy seems strong enough to maintain solid growth momentum.
