Moody's Ratings and Economic Projections for India

Moody's GDP Growth Forecast

• Moody’s Ratings has adjusted its forecast for the Indian economy, projecting growth between 5.5% to 6.5% for the calendar year 2025, down from an earlier estimate of 6.6%.
• The revision considers potential impacts from "unpredictable" US tariffs, which could disrupt business planning, hinder investment, and increase the risk of a global economic recession.

Impact on Global and Regional Trade

• The tariffs are expected to negatively affect global trade activity, reducing demand for regional exports and undermining business confidence, particularly in the Asia-Pacific region.
• Electronics, machinery, equipment, food, and textiles are identified as the most exposed sectors to US demand.

Additional Economic Risks

• Moody’s notes that India has a relatively low overall exposure but more diversified exports to the US.
• The report cautions that persistent uncertainty and financial market stress might lead the US into a recession.

Moody's Analytics and Other Projections

• Moody’s Analytics revised India's GDP forecast for 2025 downward by 30 basis points to 6.1%, citing tariff threats impacting the gems and jewellery, medical devices, and textile industries.
• The United Nations Trade and Development (UNCTAD) projects global growth to slow to 2.3% in 2025 but estimates India will grow by 6.5% due to robust public spending and ongoing monetary easing.
• The UNCTAD emphasizes risks to economic growth, particularly for developing countries facing external financial challenges and unsustainable debt.

Asian Development Bank's Outlook

• The Asian Development Bank (ADB) has revised India's GDP growth forecast for FY 2025-26 to 6.7% from an earlier 7% prediction.
• ADB identifies potential risks from US tariff policies, which could disrupt trade, investment flows, and cause financial market volatility.