Moody's lifts India's fiscal-year growth outlook to 7% amid global pressures

Moody's announced a revision of its growth projection for India, increasing the expected real GDP expansion to 7% for the ongoing fiscal year, compared with its prior 6% estimate. The agency cited India's strong performance relative to other G-20 economies and peer emerging markets, even as it faces a volatile external environment. It identified elevated global energy prices and El Niño-related food inflation as key risks to price stability, consumption and overall growth.

Moody's also observed that India's fiscal response to the West Asia conflict has been limited, but warned that higher energy costs could boost subsidy outlays and force additional government support. Moreover, rising defence and infrastructure expenditures may impede fiscal consolidation. Recent government data showed a 7.8% growth in the April-June quarter, driven by investment and manufacturing gains that offset weaker mining and consumer-service sectors.