India Likely Headed For Slower Growth In 2023, Says Moody's

Moody’s Analytics on Thursday said that the Asia-Pacific region is unlikely to have a recession in the coming year but will face headwinds from slower global trade and higher interest rates.

Its latest analysis, titled ‘APAC Outlook: A Coming Downshift,’ said that India is headed for slower growth in 2023, more in line with its long-term potential.

However, it said that inward investment and productivity gains in technology and agriculture could accelerate growth.

It warned that if high inflation persists, the Reserve Bank of India (RBI) would likely take its repo rate well above 6 per cent, causing GDP growth to falter.

On the region, Moody’s said that the economy is slowing, and due to the region’s trade dependency, it is feeling the effects of slower global trade.

Moody’s said that even though India, as well as other major economies of the APAC region, are expanding due to their delayed reopening after the pandemic, the slowdowns in Europe and North America, along with China’s sluggish economy, will lead to 2023 being slower than 2022 in terms of economic growth.

Moody projected India’s growth to slow to 8 per cent in 2022 and 5 per cent in 2023, down from 8.5 per cent in 2021.

The International Monetary Fund (IMF), in its World Economic Outlook released last month, said that India’s global growth would slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023.

(With Inputs From PTI)