Moody’s slashes India’s growth forecast to 9.1 percent in 2022, Russia-Ukraine war may harm global economic growth
The rating agency, in its Global Comprehensive Outlook 2022-23, said that India’s growth rate could be 5.4 per cent in 2023.
Russia’s invasion of Ukraine could hurt global economic growth.
Moody’s ,Moody’s) lowered India’s growth forecast for the current year to 9.1 per cent from 9.5 per cent earlier. Moody’s said that due to the cost of fuel and the fertilizer import bill (Fertilizer Import Bill) increasing the capital expenditure of the government (Capital Expenditure) may be limited. The rating agency, in its Global Comprehensive Outlook 2022-23, said that India’s growth rate could be 5.4 per cent in 2023. The report said that Russia’s invasion of Ukraine could harm global economic growth.
Moody’s said that India is particularly sensitive to high oil prices. The report also said that since the production of food grains in India is high, the increase in prices will benefit agricultural exports in the short term.
The report said Russia is the only country in the G20 economy that could see a contraction this year and forecast its economy to shrink 7 per cent in 2022 and 3 per cent in 2023, up from 2 per cent before the attack on Ukraine, respectively. percent and is below the projected growth of 1.5 percent.
What is capital expenditure?
Government expenditure is divided into two parts- Capital Expenditure and Revenue Expenditure. Expenditure which increases the assets of the government is considered as capital expenditure. At the same time, revenue expenditure means such expenses, in which salary and pension etc. of employees come. This neither increases the income of the government nor increases the production capacity.
impact of crude oil prices
The rating agency said, India is particularly vulnerable to high oil prices, as it is a major importer of crude. Since India is a surplus producer of food grains, agricultural exports will benefit from higher prices in the short term. High oil prices and potential fertilizer costs put a financial burden on the government. This will limit the capital expenditure of the government.
For all these reasons, we have reduced our 2022 growth projections for India by 0.4 percentage points, Moody’s Investors Service said. Now we expect the economy to grow by 9.1 percent this year. It has forecast a growth of 5.4 per cent for 2023. Year-end inflation for India in 2022 has been projected to be 6.6 per cent. The economy grew by 8.2 percent in the calendar year 2021. In the year 2020 of the Kovid-19 epidemic, the economy declined by 6.7 percent.
Moody’s forecasts China’s economy to grow by 5.2 percent in 2022 and 5.1 percent in 2023.
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