Moody’s on Friday cut India’s GDP growth forecast for 2022 to 7% from an earlier 7.7%, as a slowing global economy and rising domestic interest rates will dampen growth momentum.

This is the second time Moody’s Investors Service has downgraded India’s growth forecast. In September, the company lowered its forecast for the current year to 7.7% from 8.8% in May.

“For India, the 2022 real GDP growth forecast has been revised down to 7% from 7.7%. The downward revision assumes higher inflation, higher interest rates and slowing global growth will dampen economic momentum more than we previously expected,” the agency said in its 2023-24 Global Macro Outlook.

Moody’s expects growth to slow to 4.8% in 2023 before rising to around 6.4% in 2024. Moody’s said the global economy was on the verge of a downturn due to persistent inflation, tighter monetary policy and high uncertainty about fiscal policy challenges, geopolitical changes and financial market volatility.

Global growth will slow in 2023 and remain subdued in 2024. However, Moody’s added that 2024 could see a period of relative stability if governments and central banks manage to navigate the economy amid current challenges.