Global ratings agency Moody’s on Thursday cut down India’s economic growth for the current fiscal to 7.7% from its previous estimate of 8.8% in May, PTI reported. It also lowered India’s growth forecast for 2023 to 5.2% from 5.4%.

The agency cited the rising interest rates, uneven distribution of monsoon and slowing global growth for the reduced projection.

Moody’s estimate came a day after data released by the Indian government showed that the country’s economy grew by 13.5% in the first quarter (April-June) of the financial year 2022-’23.

The growth rate, however, was below the expectations of the Reserve Bank of India, which earlier this month had projected the first quarter GDP growth to be at 16.2%.

On Thursday, Moody’s said that the Reserve Bank of India is likely to maintain a reasonably tight policy stance in 2023 to prevent domestic inflationary pressures from building further.

“Inflation remains a challenge with the RBI having to balance growth and inflation, while also containing the impact of imported inflation from the year-to-date depreciation of the Indian rupee against the US dollar of around 7%,” the agency said, according to Live Mint.

It also said that high-frequency data for the Indian economy shows strong and broad-based underlying momentum in the first quarter of 2022-’23, according to PTI.

“Services and manufacturing sectors have seen robust upswings in the economic activity, according to hard and survey data, such as PMI [Purchasing Managers Index], capacity utilisation, mobility, tax filing and collection, business earnings and credit indicators,” Moody’s said.

The agency said that it expects inflationary pressures to weaken in the July-December period of the current year and further in 2023.

“A quicker let-up in global commodity prices would provide significant upside to growth,” the agency added. “In addition, economic growth would be stronger than what is being projected for 2023 if the private-sector capex cycle were to gain steam.”