New Delhi: Global rating agency Moody's Ratings has expressed confidence in the Indian economy. The agency states that despite increased tariffs from the US and global trade tensions, India's economic position will remain b. This is primarily attributed to India's economic structure, which relies heavily on domestic demand and less on exports.
Moody's analysis indicates that robust private consumption, expansion of manufacturing capacities, and government investment in infrastructure will help offset the impact of a potential global slowdown. Furthermore, decreased inflation and potential interest rate cuts will strengthen the banking sector, facilitating easier credit disbursement.
India's Strong Position Amidst Trade Risks
Moody's believes that India is better positioned than other emerging economies to handle US tariffs and global trade risks. According to the agency, the country's b domestic demand and limited reliance on trade will maintain its stability. However, this month, Moody's revised its GDP growth forecast for India in 2025 downward from 6.7% to 6.3%. This revision accounts for changes in US trade policies.
Limited Impact of India-Pakistan Tensions
Moody's also commented on the recent escalation of tensions between India and Pakistan. The agency suggests that this situation could significantly impact Pakistan's economy, while the effect on India will be limited. The relatively limited trade relationship between the two countries will prevent any major disruption to India's economic activities.
While the global economy faces numerous uncertainties, India's domestic policies, consumption-driven model, and economic diversification enable it to navigate these challenges. Moody's assessment provides a positive signal for investors and policymakers in the Indian economy.
