Global rating agency Moody’s has raised India’s growth forecast to 6.7 percent for 2023. This forecast is slightly higher than RBI’s projection of 6.5 percent for 2023-24. India has recorded a growth of 7.8 percent in the first quarter of the current fiscal. The agency has attributed the first quarter results to strong services expansion and capital expenditures, which propelled the real GDP growth.
However, the agency highlighted that food prices could remain higher due to a below-average rainfall forecast in monsoon season. The agricultural commodity prices are also likely to shoot up if El Niño proves to be particularly strong in the second half of 2023 and early 2024, it said. The agency further observed that rate hikes are also unlikely with domestic demand remaining buoyant, and core inflation staying relatively stable.