India's economic activity picking pace, further upside to growth likely: Moody's

New Delhi: Moody’s Investors Service on Tuesday said the economic activity in India is picking up with the gradual easing of Covid restrictions and there could be further upside to growth as economies around the world gradually reopen.

In its August update to ‘Global Macro Outlook 2021-22’, Moody’s retained India’s growth forecast for the 2021 calendar year at 9.6 per cent and 7 per cent for 2022.

“In India, economic activity is picking up alongside a gradual easing of restrictions that were implemented in response to the second wave. And there is further upside to growth as economies around the world progressively reopen,” Moody’s said.

The rating agency said it expects the Reserve Bank to maintain an accommodative policy stance until economic growth prospects “durably improve”.”We expect the RBI .... To maintain the status quo until the end of this year. We expect to



see an increasing number of emerging market central banks shift to a neutral policy stance amid their gathering growth momentum later this year and early next year,” Moody’s said.

Indian economy contracted 7.3 per cent in 2020-21 fiscal.

GDP growth in the current fiscal was estimated to be in double digits initially, but a severe second wave of the pandemic has led to various agencies cut growth projections.

Moody’s had in June projected a 9.3 per cent growth for the current fiscal ending March 2022.

It said the rapid global spread of the highly contagious delta variant of the coronavirus is a stark reminder that the global pandemic is far from over, although some vaccines appear to be highly effective at suppressing the severe disease, reducing the need for hospitalisations and lowering the incidence of fatalities.