Indian economy: Moody's slashes growth forecast to 8.8% for 2022

Indian economy: Citing excessive inflation, Moody's Investors Service on Thursday slashed India's economic growth projection to 8.8 percent for 2022 from 9.1 percent earlier, as per PTI reported.

High-frequency data implies that the growth momentum from December quarter 2021 carried over into the first four months of this year, according to Moody's Global Macro Outlook 2022-23.

In the months ahead, rising crude oil, food, and fertiliser prices will put a strain on household finances and spending. According to the report, raising interest rates to prevent energy and food inflation will stifle the demand recovery's momentum, said PTI.

"We have lowered our calendar-year 2022 growth forecast for India to 8.8 per cent from our March forecast of 9.1 pr cent, while maintaining our 2023 growth forecasts at 5.4 per cent," PTT said citing Moody's Investors Service.

According to PTI, strong credit growth, a large increase in investment intentions announced by the corporate sector, and a high budget allocation to capital spending by the government indicate that the investment cycle is strengthening.

"But unless global crude oil and food prices rise further, the economy seems strong enough to maintain solid growth momentum," Moody's added.