Ratings agency Moody's Investor Service has revised India's growth forecast upwards to 9.5% from 7% earlier for the Calendar Year 2022 (CY22), and retained its forecast of 5.5% for CY23.
The speed of the recovery from the first lockdown-led contraction in Q2 2020, and subsequently in Q2 2021 during the Delta wave, was stronger than expected, and the economy is estimated to have surpassed the pre-Covid level of GDP by more than 5% in the last quarter of 2021, Moody's said.
As is the case in many other countries, the recovery is lagging in contact-intensive services sectors, but it should pick up as the Omicron wave subsides, it said.
"Our 9.5% growth forecast for 2022 assumes relatively restrained sequential growth rates; thus, there is upside potential to the growth rate."
In its global macro outlook 2022-23 update for February, Moody's said the world economy is transitioning from a tentative recovery toward more stable growth, bolstered by improvement in the Covid-19 health situation.
The Reserve Bank of India (RBI) had earlier projected India's economic growth for the financial year 2023 (FY23) at 7.8%.
It may be noted that Economic Survey has projected a growth rate of 8-8.5% for the next financial year ending March 2023. All macro indicators indicated the economy was well placed to face challenges, helped by pick ups in farm and industrial output growth, said the report.
