Slowdown in GDP growth late last year temporary: Moody's Analytics
The Hindu
Slowdown in GDP growth in December quarter was stark when compared to 11.2% growth in the same quarter of last fiscal
Moody’s Analytics on March 7, said India’s domestic economy, rather than trade, is its primary engine of growth and the slowdown in economic activity late last year will only be temporary.
The government data released last week showed India’s gross domestic product (GDP) growth slowed to a three quarter low of 4.4% in October-December, 2022, mainly due to contraction in manufacturing and low private consumption expenditure.
While the manufacturing sector contracted by 1.1% , private consumption expenditure slowed to 2.1% in the October-December quarter of current fiscal.
In its report on emerging market outlook, moody’s analytics said growth slowed substantially on a year-ago basis, with private consumption lagging overall gdp for the first time since the delta wave of COVID-19 struck the economy in the second quarter of 2021.
“Our take is that the slowdown late last year will be temporary and even salutary, helping to wring some of the demand-side pressures out of the economy without stopping it wholesale. On the external front, better growth in the U.S. and Europe’s incipient recovery will propel India at the mid-year mark,” it said.
The U.S. and Europe are India’s largest trade partners and are important destinations for exports of business services. The slowdown in GDP growth in December quarter was stark when compared to 11.2% growth in the same quarter of last fiscal.
Also read: Moody’s cuts India’s growth forecast to 6.8%
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