Moody’s Sees India’s GDP Expanding 6-6.3% in Q1, Flags Fiscal Slippage Risks

Moody’s, the global credit rating agency, has predicted that India’s gross domestic product (GDP) is set to expand by 6-6.3% in the first quarter of the fiscal year 2023-2024. While the projection indicates a recovery from the previous quarter’s growth rate, Moody’s has also raised concerns about potential fiscal slippage risks.
The estimated GDP growth reflects a positive trend compared to the previous quarter, driven by a rebound in various sectors of the Indian economy. Moody’s report highlights the gradual easing of COVID-19 restrictions, increased vaccination coverage, and the government’s supportive fiscal measures as contributing factors to the projected growth.Source:- tribute India 
However, alongside the optimistic forecast, Moody’s also flagged risks related to fiscal slippage. The agency emphasized that the Indian government must remain vigilant in managing its fiscal deficit and ensuring sustainable economic growth. The report underlines the importance of maintaining fiscal discipline, given the potential risks associated with increased government spending, especially in the context of ongoing pandemic-related challenges.
Moody’s analysis underscores the need for the Indian government to strike a delicate balance between providing necessary stimulus measures to support economic recovery and maintaining fiscal prudence. The agency emphasizes that any deviation from the fiscal consolidation path could have long-term consequences on India’s economic stability and credit profile.
The report further suggests that policymakers should focus on structural reforms to enhance India’s growth potential and attract domestic and foreign investments. Moody’s emphasizes the importance of measures to improve the ease of doing business, boost infrastructure development, and strengthen the financial sector.
As India navigates through a critical phase of economic recovery, the Moody’s assessment serves as a reminder for policymakers to remain cautious and proactive in their efforts to ensure sustained growth while addressing fiscal challenges.
Share your views and comment below