Economy of India / India's economy will grow at rocket speed, will loan EMI decrease?

Economy of India: Moody's, a leading rating agency of the world, has made two important estimates about India's economy and the loan EMI of common people. While on the one hand Moody's has talked about the stable growth of the Indian economy, on the other hand its estimate on loan EMI may be somewhat disappointing for the citizens of India. Moody's has acknowledged the strength of India's economy in the last few years and has seen it as an important engine of the global economy. Let us know what analysis and estimates Moody's has presented this time.

India's economy pace

Moody's has a positive outlook about the Indian economy in its report. According to the rating agency, India's economy can grow at a rate of 7.2 percent in 2024, and in 2025 this growth can be limited to 6.6 percent. Moody's also said that there are signs of solid growth and low inflation in the Indian economy. Apart from this, India's economy looks very strong in the global scenario, which is in good shape despite the global crises.

According to Moody's, India's GDP is expected to grow by 6.7 percent year-on-year in the second quarter of 2024 (April-June). This is due to improvement in domestic consumption, strong investment and increase in manufacturing activities. Apart from this, high frequency indicators in India such as manufacturing and service PMI (Purchasing Managers' Index), strong loan growth and consumer confidence are also helping to maintain economic momentum.

Moody's view on the economic situation

Moody's also said that a strong economic performance is expected for India's economy in 2024, which points to the possibility of GDP growth of 6.7 percent. After this, this growth rate can be 6.6 percent in 2025 and 6.5 percent in 2026. Moody's described India in its report as being in a state of 'solid growth and soft inflation', which is a positive sign for the Indian economy in the coming times.

No interest rate cut expected

However, Moody's also warned that there is no possibility of any immediate cut in interest rates in India. According to the rating agency, the Reserve Bank of India (RBI) may maintain tight monetary policy in view of inflation risks. This means that there will be no major reduction in interest rates in the near future, which may be a concern especially for loan takers. However, Moody's also said that retail inflation may come within the range set by the Reserve Bank in the coming months, especially food prices are expected to come down, as there is more sowing and adequate foodgrain reserves.

Impact on loan EMI

Moody's estimate for the common citizens of India is that there is little chance of getting relief in loan EMI due to the impact of inflation and monetary policy. Maintaining a tight monetary policy by the Reserve Bank may keep interest rates high, which may increase the pressure on loan EMI. As a result, Indian citizens may have difficulty paying installments on their home loans, personal loans and other types of loans, which can put additional pressure on their budget.

Conclusion

Moody's has a positive outlook on India's economy and sees it in a strong position despite global economic challenges. There are signs of solid growth in India's GDP and low inflation, which is good news for the country. However, pressure on loan EMIs is likely to increase, as there is little hope of reduction in interest rates. In such a situation, Indian citizens will need to pay attention to their financial management.