Moody's raises India's growth forecast to seven per cent

Moody’s Ratings has raised India’s GDP growth forecast to 7% for the current fiscal year from its earlier projections of 6.5%, citing strong domestic consumption, improving investment and the economy’s resilience to higher global energy prices. In its Global Macro Outlook 2027-28 report, the ratings agency said India’s economic growth is expected to remain near seven per cent over the medium term, with sustained private investment potentially pushing growth even higher. Moody’s also pointed to stronger capital goods production and imports, faster industrial credit growth and improving capacity utilisation as signs of a recovery in private investment. 
It noted that the country has handled the global energy price shock better than previously expected, helped by its ability to diversify crude oil and gas supplies. However, the agency cautioned that risks to growth remain, particularly from rising inflation, weaker agricultural output and higher interest rates.
"With the RBI on track to raise rates further, tighter monetary policy could delay the recovery in private investment," Moody's added. India is also home to the world's largest single-site refining complex, and its large and sophisticated refining capacity has helped limit fuel supply disruptions while supporting its role as a major exporter of refined petroleum products, Moody's added. Broader economic activity also remains solid amid expanding manufacturing and services purchasing manager indexes and double-digit year-on-year growth in goods and services tax revenue, vehicle sales and merchandise exports, it added.