Moody’s on Sunday said that the Indian economy was expected to clock 6-6.3 per cent growth in June quarter. The rating agency also flagged risks of fiscal slippage arising from weaker-than-expected government revenues in FY24. 

Moody’s growth estimate is lower than the 8 per cent projection for the first quarter made by the Reserve Bank of India last week. 

In an interview with the PTI, Moody’s Investors Service Associate Managing Director Gene Fang said India had a relatively high level of general government debt at around 81.8 per cent of GDP for 2022-23, and low debt affordability. 

India, he said, had a high growth potential and its credit strengths included a stable domestic financing base for government debt as well as a sound external position. 

“'We expect India's growth to come in around 6-6.3 per cent in the first quarter of the current fiscal year, which remains relatively flat from the 6.1 per cent recorded in the final quarter of fiscal 2022-23,” Mr Fang said. 

While household demand was likely to see an improvement, given the moderation in both headline and core inflation readings, lagged effects of higher interest rates posed some risks on Gross Fixed Capital Formation, in particular, Mr Fang added. 

Gross Fixed Capital Formation (GFCF) is an indicator of investment in the economy. 

Mr Fang said as a Baa3-rated sovereign, India’s strengths lay in its large and diversified economy with a high growth potential, which was evident in the relatively-strong growth forecast this year despite the weaker global economic outlook.