Indian economy to grow at 7.5 per cent in 2015: Moody's
The growth projections come soon after Moody’s had revised India’s sovereign ratings outlook to positive (Baa3) from stable. Another ratings agency, Fitch, had reaffirmed its stable outlook on India.
Global Rating Agency Moody's on 17 April 2015 forecasted that Indian economy will grow at 7.5 percent in 2015. This growth rate is marginally higher compared with 7.2 percent in 2014.
As per the report, India's economy is on a cyclical upswing and forward-looking indicators suggest domestic demand is gathering momentum.
Also, low inflation has enabled the Reserve Bank of India (RBI) to cut interest rates by 50 basis points easing pressure on the private sector.
Lower rates as well as the government's infrastructure and disinvestment programs should provide a boost to domestic-oriented industries.
On the issue of foreign investment, it said that though foreign investment in India has been weak because of significant red tape and taxes but government is taking encouraging steps to reduce these burdensome regulations to entice more foreign investment.
On the disinvestment front, it said the government has begun selling public sets as it plans to raise 70000 crore rupees in fiscal 2015-2016.
However, lower government spending is a downside risk to forecast over the coming year because if revenues fall short, the government is expected to cut expenditure to meet its 3.9 percent deficit target for 2015-2016.
The growth projections come soon after Moody’s on 9 April 2015 had revised India’s sovereign ratings outlook to positive (Baa3) from stable. Another ratings agency, Fitch, had reaffirmed its stable outlook on India.
Earlier on 14 April 2014, International Monetary Fund (IMF) in its World Economic Outlook April 2015 update projected that India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 percent, helped by its recent policy initiatives, pick-up in investments and lower oil prices.
Also, World Bank in its South Asia Economic Focus report released on 13 April 2015 projected that Indian economy will grow at 7.5 percent in 2015-16 and could reach 8 percent in 2017-18.