Moody's raises GDP growth forecast to 9.5% for 2022

New Delhi: Moody's Investors Service on Thursday raised India's growth forecast to 9.5 per cent for the calendar year 2022 and to 8.4 per cent for the coming fiscal beginning April 1, even as it flagged high oil prices and supply distortions as a drag on growth. Stating that the economic recovery from the first and second Covid wave in 2020 and 2021, respectively has been stronger than expected, Moody's said Goods and Services Tax (GST) collection, retail activity and Purchasing Managers' Index (PMI) suggest solid momentum.

"We have raised our 2022 calendar year growth forecast for India to 9.5 per cent from 7 per cent, and maintained our forecast for 5.5 per cent growth in 2023. This translates into 8.4 per cent and 6.5 per cent in fiscal years 2022-23 and 2023-24, respectively," Moody's said in an update to its Global macroeconomic outlook 2022-23.

The speed of the recovery from the first lockdown-led contraction in the June quarter of 2020 and subsequently in the June quarter of 2021 during the Delta wave was stronger than expected. In November last year, Moody's had forecast India's economy to expand 7.9 per cent in the 2022-23 fiscal beginning April 1.

As per official estimates, Indian economy is estimated to grow at 9.2 per cent in the current fiscal ending March 31. Moody's said, "the economy is estimated to have surpassed the pre-Covid level of GDP by more than 5 per cent in the last quarter of 2021. Sales tax collection, retail activity and PMIs suggest solid momentum. However, high oil prices and supply distortions remain a drag on growth," it said.