Moody's Analytics said in its report that the decline in the growth rate in the December quarter is temporary. This decline was recorded due to decreased personal expenditure and pressure on manufacturing activity.
Moody's termed the slowdown in the Indian economy in the October-December quarter as temporary. According to Moody's Analytics, the decline in the growth rate in the third quarter of the current financial year i.e. 2022-23 is quick. In the past, the figure for GDP growth was released by the government. According to this, the growth rate for the third quarter was 4.4 percent, the lowest in three quarters. The reason for this decline was a decline in personal expenditure and a slowdown in manufacturing activity.
The pace of manufacturing activity declined
In the October-December quarter of the current financial year, the manufacturing sector declined by 1.1 percent, while the pace of private consumption also slowed down to 2.1 percent. Moody's has 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 Covid-19 on the economy in the second quarter of 2021 that the pace of the entire GDP has slowed down due to personal expenditure.
Demand pressure will go away
It said, “We believe that the decrease in speed towards the end of the last year is temporary, but will also be beneficial to some extent. Because this will help in removing the demand-related pressure without stopping the economy completely. India will also get the benefit of better growth in the middle of the year in the initial revival in America and Europe.
The growth rate estimate for the next financial year has been increased.
By the way, Moody's has reduced the growth forecast for the financial year 2022-23 to 6.8 percent. Earlier its estimate was 7.4 percent. However, the growth rate estimate for the next financial year i.e. 2023-24 has been increased from 4.8 percent to 5.5 percent.
