Moody’s Ratings Outlook
- Revised GDP forecast: 5.5% to 6.5% (down from 6.6% projected in February 2024).
- Primary concern: Unpredictable U.S. tariffs and global trade tensions.
- Report title: “Tariffs and Trade Turmoil”.
- Risks Identified:
- US tariff regime (10% universal, 145% on China) may stall investment and raise global recession risk.
- Business planning and confidence across Asia-Pacific likely to suffer.
- India’s exposure to US is relatively low but diversified across electronics, machinery, textiles, and food.
- Sectors like gems & jewellery, medical devices, textiles most vulnerable to tariff disruptions.
Moody’s Analytics (subsidiary)
- Cut India’s 2025 growth forecast to 6.1%, citing specific tariff impacts.
UNCTAD Outlook
- India 2025 GDP forecast: 6.5%, higher than Moody’s lower-end estimate.
- Global context:
- World growth expected to slow to 2.3% due to trade disputes and uncertainty.
- Developing countries, including India, face headwinds, but robust domestic factors provide support.
- Key Growth Drivers for India:
- Strong public capital spending.
- Monetary easing: The RBI cut rates by 25 basis points in early February 2025 — first cut in five years.
- Lower rates expected to stimulate private investment and boost consumption.
While Moody’s flags downside risks from global trade disruption, UNCTAD remains bullish on India’s domestic resilience, supported by fiscal and monetary measures. Both forecasts reflect uncertainty, but position India as a relative outperformer in a slowing global economy.
