Good news has come from abroad for the Modi government (PM Modi Govt). Although inflation has increased in the country, major rating agencies remain positive towards the Indian economy. Global company Moody’s Ratings has said in its latest report that the Indian economy is in the “sweet spot” with excellent growth. Additionally, the agency predicted an increase in GDP growth.
The economy will grow at a speed of 7.2%
Moody’s Ratings confirmed in its outlook report on Friday that the Indian economy is in better condition. The global agency has estimated a GDP growth of 7.2 per cent for India in calendar year 2024, making it clear that the country is in a better economic situation. However, Moody’s has warned that due to the risk of inflation, the Reserve Bank of India (RBI) could maintain a relatively tight monetary policy.
The economy will continue to grow
In its report, Moody’s Ratings states that India is in a better position with strong growth. Apart from estimating a growth rate of 7.2 percent in 2024, the rating agency predicted that the Indian economy will grow at a rate of 6.6 percent in 2025, while by 2026 it said the pace of the Indian economy will be 6.5 percent. Moody’s has also mentioned in its report many reasons why the economy remains in better condition.
Good business prestige and better bank balance
According to Moody’s, strong economic fundamentals indicate that the Indian economy is in better condition. Good corporate and bank balance sheets and adequate foreign exchange reserves also support India’s growth prospects. Along with this, there is also the possibility of an increase in domestic demand. This is due to increased spending during the festive season and continued growth in rural demand due to improved agriculture. In its report, the foreign agency clearly says that the Indian economy is growing strongly and has the potential to maintain a high growth rate.
Rising inflation has no significant effect
Despite the recent rise in retail inflation, Moody’s expects it to remain in line with the RBI’s prescribed range in the coming months. This is because food prices will stabilize due to increased planting and adequate food reserves. It should be noted that due to the sharp rise in food prices, especially vegetables, retail inflation reached the level of 6.21 percent in October, its highest level in 14 months.
