India's GDP to grow 7% in FY27, says Moody's
What's the story
Credit ratings agency Moody's has revised India's real Gross Domestic Product (GDP) growth forecast for the current fiscal year from 6% to a more optimistic 7%. The revision comes in light of India's resilience amid the ongoing conflict in the Middle East. "Although we continue to expect India to grow faster than all other G-20 economies, as well as similarly rated emerging market sovereigns, risks remain," Moody's said.
Economic challenges
High energy prices, food price pressures could threaten growth
Moody's has identified high energy prices and food price pressures related to El Nino as potential threats to India's inflation, consumption, and growth.
The agency noted that India's fiscal policy response to the West Asia shock has been subdued.
However, it warned that rising global energy prices could lead to higher subsidy spending and pressure the government for more support.
Growth surge
India recorded 7.8% GDP growth in April-June quarter
India's economy grew by an impressive 7.8% in the April-June quarter, government data showed last month.
This growth rate comfortably beat expectations, driven by a surge in investment and manufacturing activity.
The robust performance has managed to offset weaknesses seen in sectors such as mining and consumer-facing services.