TestCloud
Prep • Practice • Perform
Log In

"Moody's Downgrades India's FY25 Economic Growth Forecast to 7% Amid Global Challenges and Inflation Control Measures".

Economy Business | Dated: 22 Jan 2025

On January 20, 2025, Moody's Corporation revised India's economic growth forecast for the financial year 2024-25 (FY25), lowering it to 7%, down from 8.2% in FY24. The downgrade reflects the impact of tight monetary policies aimed at controlling inflation, along with global challenges such as geopolitical tensions and adverse weather conditions.

🎯 Key Highlights:

  • - India's GDP growth is projected to slow to 7% in FY25, compared to 8.2% in FY24. While this represents a slowdown, the growth rate is still strong relative to global averages.
  • - Agriculture and services continue to show positive growth, with agriculture expanding by 3.5% and services by 7.1%. However, industrial growth remains weak at 3.6%.
  • - India's GDP per capita, adjusted for purchasing power parity, rose by 11% year-on-year, reaching USD 10,233 in FY 2023.

💡 Other Important Facts:

  • (i) The Federation of Indian Chambers of Commerce and Industry (FICCI) revised its growth forecast for FY25 to 6.4%, down from 7%.
  • (ii) The Asian Development Bank (ADB) revised its forecast for FY2024 to 6.5% and for FY2025-26 to 7%, citing the impact of tighter monetary policies on demand.
  • (iii) The Reserve Bank of India (RBI) had initially projected 7.2% growth for FY25 but has since revised its forecast down to 6.6% due to shifting economic conditions.

📚 Test Your Knowledge:

In which financial year did Moody's downgrade India's GDP growth forecast due to global challenges and inflation control measures?

Correct Answer: FY25

🚀 Quick Recap: