Global growth is set to slow, but India continues to be a bright spot, says Moody’s

Amid the risk of sticky inflation affecting the growth trajectory of global economy, India can appear as a “pocket of resilience” in the scenario, according to Moody's Investors Service.

Experts from Moody's highlighted the favourable conditions of robust growth in markets like India and Indonesia in the current year, reported CNBC.

Shadow of slowdown on the global economy 

Moody's is expecting global slowdown in growth, Marie Diron, managing director for global sovereign and sub-sovereign risk at Moody's Investors Services told CNBC. She also hinted on the possible impact of global economic slowdown on Asia through trade conditions as well as access to financing in the region.

She also mentioned that the slowdown can be led by three factors, ie higher interest rates by central banks, China's slow growth, and financial system stresses.

She also underlined the persistent threat of inflation despite central banks' raging war against it.

“There are still risks out there that inflation could prove stickier ... than currently expected, and that would lead to higher risks for longer and slower growth,” the managing director told CNBC.

Talking about India's neighbouring country China, Moody's expert presented a quite grim view of its economic scenario. She said that Moody's is not expecting a major turnaround in the world's second largest economy. 

Pockets of resilience

In the current scenario the Global South is emerging as a ray of hope for the world. Validating the statement, Moody's Diron said, "We see relatively robust growth and favourable conditions in markets like India and Indonesia.”
She underlined Indonesia's “vast natural resources” that can be materialised by Indonesia for its economic growth and the development of downstream sectors through processing of minerals through the value chain.

Meanwhile, India witnessed one of its best performing quarters of the year in April-June quarter in terms of economic growth, says the latest GDP data.

India's gross domestic product (GDP) grew by 7.8 per cent in the April-June quarter of current fiscal (2023-2024), against 6.1 per cent in the previous January-March quarter of fiscal 2022-23, as per the official data shared by the National Statistical Office. With this, India continued to be one of the fastest growing major economies of the world. The recent GDP data met experts expectations who projected that the economy recorded the fastest annual pace in a year, driven by the services sector and greater capital expenditure.