Moody’s on Thursday slashed India’s growth estimate for the current year to 9.1 per cent, from 9.5 per cent earlier, saying high fuel and fertilizer import bill could limit the government’s capital expenditure.

In its Global Macro Outlook 2022-23 (March 2022 Update) titled: Economic Growth will suffer as fallout from Russia’s invasion of Ukraine builds, the rating agency said that India’s growth is likely to be 5.4 per cent in 2023.

It said India is particularly vulnerable to high oil prices, given that it is a large importer of crude oil. Because India is a surplus producer of grain, agricultural exports will benefit in the short-term from high prevailing prices.

“High fuel and potentially fertilizer costs would weigh on government finances down the road, potentially limiting planned capital spending.

“For all of these reasons, we have lowered our 2022 growth forecasts for India by 0.4 percentage point. We now expect the economy to grow by 9.1 pc this year,” Moody’s Investors Service said.

It said that the forecast revisions also factor in the somewhat stronger underlying momentum than the agency had not accounted for previously.