Moody's slashes India's economic growth forecast to 7.7 percent for 2022

The US-based credit rating agency Moody's on Thursday slashed India's economic growth projection for the year 2022 to 7.7 percent, from its earlier estimate of 8.8 percent.

It also said that India's growth rate would further decelerate to 5.2 percent in 2023.

"Our expectation that India's real GDP growth will slow from 8.3 percent in 2021 to 7.7 percent in 2022, and to decelerate further to 5.2 percent in 2023 assumes that rising interest rates, uneven distribution of monsoons, and slowing global growth will dampen economic momentum on a sequential basis," Moody's said in its Global Macro Outlook 2022-23.

It added "A quicker let-up in global commodity prices would provide significant upside to growth. In addition, economic growth would be stronger than we are projecting in 2023 if the private-sector capex cycle were to gain steam."

Moody's also said that inflationary pressures would weaken in the second half (July-December) of the year and further in 2023.