Domestic demand to keep growth up: Moody's

Strong domestic demand is likely to sustain India's economy in the near term, said Moody's on Thursday as it kept the country's growth forecast for 2023 and 2024 unchanged at 6.7 and 6.1 per cent.

- RUCHIKA CHITRAVANSHI

"Robust goods and services tax collections, surging auto sales, rising consumer optimism and double-digit credit growth suggest urban consumption demand will likely remain resilient amid the ongoing festive season," said the rating agency's 'Global Macro Outlook 2024' report.

Domestic demand after the festive season will depend on inflation and the lagged impact of monetary policy tightening by the Reserve Bank of India (RBI).

"With exports remaining weak amid an unfavorable global economic backdrop, strong domestic demand will likely sustain growth in the near-term," said Moody's.

While rural demand has shown signs of improvement, it remains vulnerable to uneven monsoons that could affect crop yields and farm income.