Home / News / India /  India headed for slower growth in 2023; tech and agri to boost growth: Moody's

India is headed for slower growth next year more in line with its long-term potential, Moody's Analytics said in its latest report 'APAC Outlook: A Coming Downshift' on Thursday. The rating agency said that inward investment and productivity gains in technology and agriculture could accelerate growth in the country.

However, in case of inflation persists, the Reserve Bank of India (RBI) would increase the repo rate above 6%, causing GDP to falter, Moody's claimed.

In August, Moody's projected India's growth to slow to 8% in 2022 and further to 5% in 2023, from 8.5% in 2021.

The US-based financial services company the economy of the Asia-Pacific (APAC) region is slowing, but a recession is unlikely in the region, it said.

However, the APAC region will face headwinds from higher interest rates and slower global trade growth, Moody's Analytics said.

"That said, a recession is not expected in the APAC region in the coming year, although the area will face headwinds from higher interest rates and slower global trade growth," Moody's Analytics Chief APAC Economist said.

As per the report, China is not the only weak link in the global economy. India also suffered a year-to-year decline in value exports in October.

However, it said, "India relies less on exports as an engine of growth than does China".

Moody's Analytics Chief APAC Economist Steve Cochrane said even though India, as well as other major economies of the APAC region, are expanding due to their own delayed reopening from pandemic-related shutdowns, the expected slowdowns in Europe and North America, along with China's sluggish economy, will cause 2023 to be a slower year than 2022 for economic growth.

Last month, the International Monetary Fund (IMF) forecasted that global growth to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023.

India has emerged as "a bright light" at a time when the world is facing imminent prospects of a recession, IMF chief economist Pierre-Olivier Gourinchas said.

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