GDP growth may slow to 6.1% in 2024: Moody’s

India's economy will likely grow 6.1% in 2024, lower than 7.7% in 2023, Moody's Analytics on Friday projected, adding that inflation outlook remained more uncertain.

Looking at GDP relative to its trajectory prior to the Covid-19 pandemic showed that India and Southeast Asia have seen some of the largest output losses worldwide and are only beginning to recover, Moody's Analytics said in its report titled 'APAC Outlook: Listening Through the Noise'.

“Output in India remains 4%lower than it would have been without the pandemic and its various aftershocks—from supply snags to military conflicts abroad. Things are worse in ASEAN, where GDP is 6% below pre-pandemic projections. This compares with an output loss of about 2% for the world economy as a whole,” it said.

“We expect India’s GDP to grow 6.1% in 2024 after 7.7% last year.”

Moody’s Analytics said the inflation outlooks for China and India, Asia’s two largest economies, are more uncertain.

“Inflation in India is at the opposite extreme, with recent consumer price inflation rates hovering around 5%, close to the upper end of the Reserve Bank of India’s target range of 2% to 6% and without clear evidence of a trend towards slowing price pressures,” it said.

India’s retail inflation declined to a five-month low of 4.85% in March mainly due to cooling food prices, according to official data released on Friday.

In its report, Moody's Analytics said the region overall is doing better than other parts of the world. The APAC (Asia Pacific) economy will grow 3.8% this year, which compares with a growth of 2.5% for the world economy, it said.

The Reserve Bank recently said food price uncertainties continue to weigh on the inflation trajectory going forward, and retained 4.5% retail inflation projection for 2024-25.

Continuing geopolitical tensions also pose upside risk to commodity prices and supply chains, RBI said.