In its latest report, “Credit Conditions – Asia-Pacific H2 2024 Credit Outlook,” released on June 13, Moody’s Ratings highlighted that Indonesia, the Philippines, and India are leading economic growth in the Asia-Pacific region. These countries are expected to continue outperforming pre-COVID growth levels, driven by rising exports, local demand, and significant government investment in infrastructure.
India to Remain Asia-Pacific’s Fastest-Growing Economy
Moody’s noted that India will maintain its position as the fastest-growing economy in the Asia-Pacific region in 2024. The agency attributes this sustained momentum to domestic factors and anticipates policy continuity following the general election, with a continued focus on infrastructure development and private-sector investment encouragement.
“India will remain the region’s fastest-growing economy, sustaining last year’s domestically driven momentum. We anticipate policy continuity after the general election, and a continued focus on infrastructure development and encouragement of private sector investment,” Moody’s stated.
Portfolio Inflows and Corporate Credit Strength; Moody’s
Moody’s report also indicated that stronger portfolio inflows are expected in India and ASEAN economies, owing to robust corporate credit metrics and appealing valuations. Last month, Moody’s Ratings pegged the growth of the Indian economy at 6.6% for the current fiscal year. This growth is expected to bolster the profitability of the non-bank finance companies (NBFCs) sector due to strong credit demand and robust economic growth.
“We expect India’s economy to expand 6.6% in the year ended March 2025 (FY25) and 6.2% the following year, and this will lead to robust loan growth at NBFCs, mitigating the impact of rising funding costs on their profitability,” Moody’s Ratings explained.
Comparison with Other Forecasts
Moody’s FY25 GDP growth predictions for India are slightly lower than those of the Reserve Bank of India (RBI) and other agencies. The RBI projected a 7% growth for the current fiscal year. Similarly, the Asian Development Bank (ADB) and Fitch Ratings have estimated a 7% growth, while S&P Global Ratings and Morgan Stanley forecast a 6.8% growth rate.
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