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Moody's slashes India's GDP projection to 8.8% for 2022
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SME Times News Bureau | 26 May, 2022
Global financial services provider firm Moody's Investors Service has
slashed India's GDP projection to 8.8 per cent for 2022, from 9.1 per
cent estimated previously.
The rationale behind the cut was the prevailing high inflation.
"Except
for Russia, we do not currently expect a recession in any G-20 country
in 2022 or 2023," said Madhavi Bokil, Senior Vice President/CSR at
Moody's on the global perspective.
"Still, there are multiple
risks that could further undermine the economic outlook, including
additional upward pressure on commodity prices, longer-lasting
supply-chain disruptions, or a larger than expected slowdown in China."
Further,
aggressive monetary tightening, amid worries of long-term inflation
expectations getting unanchored, could also become a catalyst for a
recession.
The next few months will be critical if the global
economy can remain resilient over this period, the growth path could
become more sustainable through next year, Moody's said.
Economies
are returning to a post-pandemic normal, which involves reversals of
some economic patterns to pre-Covid trends and permanent changes to
others.
As pandemic disruption wanes, households are once again
spending more of their incomes on high-contact service activities and
buying fewer goods, it said.
As central banks shift to tighten
monetary policy in response to higher inflation, there has been a rise
in financial market volatility and asset repricing. Bond yields the
world over have risen in anticipation of further interest rate hikes,
equity prices have fallen from their peaks and the US dollar has
strengthened, it added.
India's retail inflation accelerated to
7.79 per cent in April, remaining above the tolerance limit of central
bank RBI for a fourth month in a row due to high fuel and food prices
amidst Russia invasion of Ukraine.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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