Moody’s Analytics Revised India’s CY25 GDP Growth Forecast Down to 6.1%.
Economy Business
In April 2025, New York-based Moody's Analytics, a subsidiary of Moody's Corporation, released its latest report titled "APAC Outlook: US Versus Them." According to the report, India's Gross Domestic Product (GDP) growth forecast for Calendar Year 2025 (CY25) has been revised downward by 30 basis points (bps) to 6.1%, compared to its previous estimate of 6.4% (March 2025).
- The report attributed the revision to potential risks posed by new tariffs imposed by the United States (USA), especially affecting sectors such as gems and jewellery, textiles, and medical devices.
- However, it also emphasized that India's overall economic growth remains relatively insulated from such external shocks, as external demand contributes a smaller share to the country’s total GDP.
- The report highlighted that the United States of America (USA), one of India's major trading partners, has imposed a 26% tariff on Indian imports, significantly impacting India’s trade balance. Notably, President Donald Trump announced this reciprocal tariff on 60 countries including India, effective April 9, 2025. However, the Trump administration later declared a 90-day freeze on implementing the tariffs, excluding China.
Main Point :- (i) According to Moody’s Analytics, the Reserve Bank of India (RBI) is expected to cut interest rates due to easing headline inflation, predicting a 25 basis points (bps) reduction in the policy rate to 5.75% by the end of Calendar Year 2025 (CY25).
(ii) The report also revised down the GDP growth projections for several Asia-Pacific countries, including China, New Zealand, Indonesia, South Korea, and the Philippines. However, India's GDP downgrade was comparatively less severe, given its lower dependency on exports when compared with countries like Vietnam, China, and Taiwan.
(iii) Additionally, the RBI, in its 1st Bi-monthly Monetary Policy for FY2025-26, announced in April 2025, had already reduced India’s GDP growth forecast from 6.7% to 6.5% for the fiscal year, further reinforcing Moody’s outlook.
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President : Stephen Tulenko
Headquarters : New York, the United States of America (USA)
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