Moody’s Investors Service, a global credit rating agency, on Wednesday raised India’s economic growth estimate for 2023 to 5.5 per cent from 4.8 per cent pegged earlier in November 2022.

The upward revision comes on the back of the big capital expenditure push in budget 2023-24, besides continued resilience in the growth momentum of the economy. For 2024, India’s economic growth has been pegged at 6.5 per cent.

However, Moody’s has lowered India’s growth estimate for 2022 to 6.8 per cent from the 7 per cent it projected in November last year.

In the latest February update to Global Macro Outlook 2023-24, Moody’s said India’s growth projection has been “meaningfully raised” as strong data in the second half of 2022 created large carryover effects of 2023.

“In the case of India, the upward revisions additionally incorporate the sharp increase in capital expenditure budget allocations to ₹10 trillion (3.3 per cent of GDP) for fiscal year 2023-24, up from ₹7.5 trillion for the fiscal year ending March 2023,” Moody’s said.

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In the latest update, Moody’s noted that economic momentum in a number of large emerging market countries , including India, has proved more resilient to last year’s tightening in the global and domestic financial environment than it had anticipated.

Moody’s expects global growth to continue to slow in 2023, with increasing drag from cumulative monetary policy tightening on economic activity and employment in most major economies. ”We forecast G20 global economic growth will downshift to 2 per cent in 2023 from 2.7 per cent in 2022 and then to improve to 2.4 per cent in 2024,” Moody’s said. 

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