India to grow at 7.3 % in 2019, 2020: Moody’s - Hindustan Times
close_game
close_game

India to grow at 7.3 % in 2019, 2020: Moody’s

New Delhi | ByPress Trust of India
Mar 01, 2019 01:52 PM IST

The US-based rating agency said that the country is less exposed to a slowdown in global manufacturing trade growth than other major Asian economies and emerging markets and is poised to grow at a relatively stable pace in the two years.

Indian economy is expected to grow at 7.3 per cent in calendar year 2019 and 2020, and the government spending announced ahead of elections this year which will support near-term growth, Moody’s said on Friday.

Moody’s growth estimates in based on calendar year. India, however, measures its economic growth on the basis of fiscal year (April-March).(AFP/ Representative Image)
Moody’s growth estimates in based on calendar year. India, however, measures its economic growth on the basis of fiscal year (April-March).(AFP/ Representative Image)

The US-based rating agency said that the country is less exposed to a slowdown in global manufacturing trade growth than other major Asian economies and emerging markets and is poised to grow at a relatively stable pace in the two years.

Hindustan Times - your fastest source for breaking news! Read now.

“We expect India’s economy to grow around 7.3 per cent in both years (2019, 2020),” Moody’s said in its quarterly Global Macro Outlook for 2019 and 2020.

Moody’s growth estimates in based on calendar year. India, however, measures its economic growth on the basis of fiscal year (April-March).

In 2018-19 fiscal, ending March 2019, Indian economy is estimated to have grown 7 per cent, lower than 7.2 per cent in 2017-18.

Moody’s said the announcement in Interim Budget 2019-20 on direct cash transfer programme for farmers and the middle-class tax relief measures will contribute a fiscal stimulus of about 0.45 per cent of GDP.

“These measures will support growth through consumption over the near term, albeit at a fiscal cost...

“In India, government spending announced ahead of elections this year will support near-term growth,” Moody’s said.

It said RBI is likely to be able to maintain their current monetary policy stance after some tightening last year.

The RBI cut its benchmark policy rate in February and changed the policy stance to “neutral” from “calibrated tightening”. Inflation measures have steadily declined since the middle of 2018.

On banking sector, Moody’s said, although the overall strength of the system is improving, it remains a constraint on the economy.

In February 2019, the government provided further capital infusions to public sector banks. These measures, combined with the application of the Prompt Corrective Action framework, which requires timely recognition of bad loans, and resolution of bad loans through the Insolvency and Bankruptcy Code, are helping to address solvency and asset quality challenges.

“However, a complete turnaround of the banking system requires more time amid slower-than-expected resolution of legacy problem loans,” it said.

Non-performing assets declined to 10.8 per cent in September 2018 from a peak of 11.5 per cent in March 2018. The central bank expects this ratio to improve further to 10.3 per cent in March 2019.

Moody’s said, with range-bound oil prices, export growth has outpaced import growth for the last two years. Fiscal spending on infrastructure and the rural economy should continue to support domestic activity.

(This story has been published from a wire agency feed without modifications to the text.)

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On