Slowdown in GDP growth towards the end of last year was temporary: Moody’s

The country’s domestic economy rather than trade is the major engine of India’s growth. Moody’s Analytics said this on Tuesday. Moody’s also said that the slowdown in the economy at the end of last year would be temporary. Data released by the government last week showed that India’s gross domestic product (GDP) growth slowed to 4.4 per cent in October-December 2022, a three-quarter low.

This is mainly due to a decrease in private consumption expenditure and a slowdown in manufacturing. The manufacturing sector contracted by 1.1 per cent in the October-December quarter of the current fiscal, while private consumption also slowed down to 2.1 per cent. Moody’s said in this report that there has been a significant decrease in growth on an annual basis. This is the first time since the impact of Kovid-19 on the economy in the second quarter of 2021 that the pace of the entire GDP has slowed down due to private consumption.

It said, “We believe that the slowing of the pace at the end of the last year is temporary, but will also be beneficial to some extent as it will help to relieve demand pressure without completely halting the economy.” India will also benefit from better growth in the middle of the year in the early revival in the US and Europe. Moody’s said that India’s domestic economy, rather than trade, is the main source of its growth. He said that keeping this in mind, India’s fourth quarter performance is being watched cautiously. Sectors such as manufacturing and agriculture, which are closely linked to private consumption expenditure, showed little or no growth in the December quarter of the current fiscal.

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