According to the rating agency, India is particularly vulnerable to high oil prices, given that it is a large importer of crude oil.
However, it said that as India is a surplus producer of grain, the country's 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," Moody's said.
"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 percent this year," said the rating agency.
In its Global Macro Outlook 2022-23 (March 2022 Update), it said India's growth is likely to be 5.4 percent in 2023.
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