Moody's reaffirms India's growth pace

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Moody's reaffirms India's growth pace

Moody's Investors Service said on Tuesday that India's trend of gradual fiscal consolidation remains intact and that the country will see strong revenue performance and debt stablisation going forward. The Moody's Investors Service Senior Vice President Christian de Guzman said India's 'Baa 3' sovereign rating balances its strength of high economic growth and weakness of one of the most highly indebted emerging market sovereigns. India's financial system is reflected in the deleveraging of Indian companies. We think India is going to be the fastest growing G-20 economy next year. Guzman said in a Moody's virtual event, "Sovereign Deep Dive', that high inflation pose a downside risk to India's growth as households and businesses have less purchasing power. Moody's cut India's growth projection for 2022 to 7% earlier this month, from 7.7% projected earlier this month. It expects growth to drop to 4.8% in 2023 and increase to around 6.4% in 2024. The Indian economy grew by 8.5% in 2021. In 2023, the GDP growth of the G- 20 economies is expected to decline to 1.3%, which is significantly lower than its previous estimate of 2.1%. Guzman said that there would be positive rating pressure on India due to further improvement in the fiscal situation and a faster than expected pace of fiscal consolidation.