• UGI USER
  • Aug 30, 2024
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RATING AGENCY MOODY’S REVISED INDIA’S GDP GROWTH FOR THE YEAR 2024

Why in the news?

Moody’s recently revised its growth estimate for India for the year 2024 to 7%, the rate of growth could be even higher in case of increased private consumption rates.

About India’s GDP Growth Forecast:About India’s GDP Growth Forecast:

  • Revised Forecasts: Moody has also adjusted upward the GDP growth of India in the year down to 7.2% for 2024, up from 6% and 6.8%for 2025 or it threatened to cause a slowdown in economic growth.
  • Economic Performance: India’s economy increased 7. 8% year-over-year in Q1 2024 only while monetary policy remains and continues to be tightened in some parts of the world.
  • Industry and services faced solid performance and the Services PMI has been above 60 starting from January 2024.
source:toi
What is the purchasing power parity of India?

  • Definition: Gross Domestic Product is the sum of all monetary values of final goods and services produced with a country’s borders over a given period of time and an indicator of the economy’s condition.
  • Base Year Revision: India has brought changes in base year of its GDP from 2004-05 to 2011-12 in January 2015 whereas previous changes were in January, 2010.
  • Measurement Change: To incur more reliability into the economic assessment MU was shifted from GDP at factor cost to Gross Value Added (GVA) at basic prices by CSO.

Real vs Nominal GDP:

  • Nominal GDP: It sums the value of goods and services exchanged in a certain time period at the current price level, that is, at current prices with no factor adjustments for inflation. Good for the present economic evaluation but not so accurate in the case of temporal comparisons.
  • Real GDP: To draw a more accurate comparison of what different years are capable of delivering in terms of economic performance, the data was rebased to constant prices. Measures actual production volume.