New Delhi, Feb 21 (KNN) In a significant economic forecast released on Thursday, Moody’s Analytics has predicted a continued deceleration in India’s economic growth trajectory.

The renowned credit rating agency anticipates India’s Gross Domestic Product (GDP) growth rate to moderate to 6.4 percent in 2025, down from 6.6 percent in 2024, citing new U.S. tariffs and dampened global demand as primary factors affecting the nation’s export performance.

The forecast, detailed in their report ‘Asia-Pacific Outlook: Chaos Ahead,’ indicates broader economic challenges across the Asia-Pacific region.

The analysis suggests that regional growth will face headwinds from trade tensions, policy adjustments, and uneven recovery patterns. This slowdown trend extends to China, where GDP growth is projected to decline from 5 percent in 2024 to 4.2 percent in 2025, further decreasing to 3.9 percent in 2026.

Earlier concerns about India’s economic outlook were raised in Moody’s January 29 report, which highlighted several risk factors including a weakening rupee, diminishing foreign investment, and unstable inflation.

Associate Economist Aditi Raman emphasised the necessity for policy adjustments in both fiscal and monetary domains to achieve the projected 6.4 percent growth rate.

In response to these economic challenges, Indian authorities have implemented significant policy measures. Finance Minister Nirmala Sitharaman announced substantial income tax reforms in the February 1 Budget, effectively eliminating tax obligations for incomes up to Rs 12 lakh.

Subsequently, the Reserve Bank of India enacted monetary policy changes, reducing the repo rate from 6.5 percent to 6.25 percent during its Monetary Policy Committee meeting.

The latest projections from Moody’s Analytics suggest India’s GDP growth will stabilise at 6.4 percent for both fiscal years 2025 and 2026, reflecting a gradual moderation from current levels while maintaining relatively robust growth compared to other major economies in the region.

(KNN Bureau)