New Delhi: In a notable boost to India's economic outlook, global rating agency Moody's has revised its growth forecast for the country in the 2024 calendar year from 6.1% to 6.8%. The upgrade follows India's impressive real GDP growth of 8.4% in the December quarter, resulting in a robust 7.6% growth for the entire fiscal year 2023-24. Moody's cited 'stronger-than-expected' economic data in 2023 as the key driver for this optimistic projection.

Moody's Global Macroeconomic Outlook for 2024 affirms India's position as the fastest-growing among G-20 economies, with a predicted growth rate of 6.8%. The agency further anticipates a 6.4% growth in 2025. Notably, this positive outlook aligns with Barclays, which recently revised its forecast to 7.8% for 2023-24 following the December quarter figures.

According to Moody's Investors Service, the government's capital spending and robust manufacturing activity have significantly contributed to India's impressive growth in 2023. With global headwinds subsiding, the agency expects India to comfortably register 6-7% real GDP growth. It highlights continued momentum from the December quarter extending into the March quarter of 2024, supported by robust GST collections, strong auto sales, consumer optimism, double-digit credit growth, resilient urban consumption, and expanding manufacturing and services PMIs.

Moody's foresees policy continuity after the general election, with a focus on infrastructure development. While private industrial capital spending has been slow to pick up, the agency anticipates an increase due to ongoing supply chain diversification benefits and investor response to the Production Linked Incentive scheme targeting key manufacturing industries.

The agency also underscores the broader implications of upcoming elections in various G20 countries, including India, Indonesia, Mexico, South Africa, the UK, and the US. Moody's suggests that the leaders elected in these countries will shape both domestic and foreign policies for the next 4-5 years, potentially influencing evolving geopolitical dynamics and reorganizing global supply chains.

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