India to mitigate slowing Apac growth on robust domestic demand: Moody's

Moody's Investors Service on Tuesday said growth in Asia Pacific will decelerate in 2024 as a downshift in China's growth trajectory will spill over in the region through trade in goods and services, but India will be able to mitigate the challenge aided by robust domestic demand.

In a report on Asia-Pacific, Moody's said the region is marked with a heavy calendar of elections in 2024, notably in India, Taiwan, Indonesia, Korea and Bangladesh.

"The election outcomes will either facilitate domestic policy continuity or lead to increased polarization, and have a bearing on geopolitical relationships," said a Moody's report titled 'Growth headwinds, tight funding and geopolitics will define 2024 conditions'.

It said a downshift in China's economic growth rate and a cyclical slowdown in the US will weigh on Asia-Pacific (APAC)'s credit conditions in 2024.

Peaking inflation globally will provide space for monetary tightening cycles to slow, but financial conditions will remain difficult for the weakest-rated issuers. Meanwhile, geopolitical risks will continue to shape business decisions.

"Growth will decelerate in 2024, but continue to outperform that of most other regions. The downshift in China's growth trajectory will spill over in the region through a number of transmission channels, such as trade in goods and services, commodity prices and investment.

"This will be mitigated by robust domestic demand in large emerging markets, such as Indonesia and India," Moody's said.

In November, last year, Moody's Investors Service had projected Indian's GDP to grow 6.1 per cent in 2024 and 6.3 per cent in 2025. As per Moody's, the growth in 2023 was 6.7 per cent.