Moody’s Analytics projects a modest uptick in India’s economic growth for 2024, estimating a 6.1% expansion, slightly higher than the 6% projected earlier in March. Despite the growth, it remains lower than the 7.7% recorded in 2023. The report highlights concerns regarding inflation, citing India’s recent consumer price inflation hovering around 5% with no clear evidence of abating pressure.
Inflation Dynamics and RBI’s Outlook
Moody’s Analytics underscores the persistent challenge of inflation across the Asia-Pacific (APAC) region, with uncertain trends. The Reserve Bank of India (RBI) maintains a cautious stance, particularly regarding food prices, and projects a retail inflation rate of 4.5% for the fiscal year 2024-25. Geopolitical tensions further complicate the inflation outlook, with risks to commodity prices and supply chains.
Economic Performance and Post-Pandemic Rebound
The report assesses the economic landscapes of major APAC economies, noting a divergence in domestic demand dynamics. While China and Japan face hurdles due to weak internal demand, India and ASEAN economies benefit from a delayed but improving post-pandemic rebound. However, the output in India remains below pre-pandemic levels by 4%, indicating ongoing recovery challenges from various disruptions, including supply chain issues and geopolitical conflicts.
Regional Comparisons and Recovery Trajectories
Moody’s Analytics places the recovery of India and Southeast Asia in the context of broader regional and global trends. Despite significant output losses compared to pre-pandemic trajectories, the Asia-Pacific region demonstrates resilience, with a forecasted growth of 3.8% in 2024, outpacing the global economy’s projected 2.5% growth.
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