Economic Growth: S&P gives ‘thumbs up’ to Indian economy, growth will remain strong in the next quarters
India’s economic growth (India’s Economic Growth) Rate will remain strong in the coming quarters. However, with the rise in food prices, inflation may remain high. Credit rating agency S&P Global Ratings said this on Wednesday. According to the agency, the economic growth rate in the current financial year is estimated to be 9.5 percent, while in the next financial year 2022-23 it can be 7 percent. High GDP (Gross Domestic Product) growth rate at market price will be important to ensure fiscal consolidation in the times to come.
Andrew Wood, director (government) at S&P Global Ratings, said: “Given the weak position of India’s fiscal deficit and debt to GDP approaching 90 per cent, it is important to prevent further deterioration in the fiscal position and strengthen it to some extent.” The GDP growth rate at market price is important for this. He said the fiscal deficit would remain high for the next two years but the debt/GDP ratio is expected to be stable.
Wood said that India’s external position in the context of the pandemic has strengthened and the country has mobilized foreign exchange reserves at a record pace. “India’s external position is very strong and despite the fact that the fiscal position has deteriorated, it is very helpful in terms of the government’s creditworthiness of the country,” he said.
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“We are expecting strong economic growth in the third and fourth quarters,” said V Rana, S&P Economist (Asia Pacific) in ‘India Credit Spotlight 2021’. He said that the second wave of the epidemic was not good in terms of economic activities. Families have been affected… Families will focus on rectifying their deposits and rein in spending. This means that activities with economic revival will not be in line with it.
The country’s economic growth rate in the April-June quarter of the current financial year has been 20.1 percent due to weakening of the comparative base in the same period last year. Earlier, in the previous quarter January to March 2021, the growth rate was 1.6 percent. Rana said that inflation is at a high level of the target range. This means that the central bank will keep an eye on the inflation rate.
The Reserve Bank of India has been entrusted with the responsibility of keeping the inflation rate at the level of 4 percent with 2 percent variation.
S&P has placed India at the lowest investment rating ‘BBB-‘ with a stable outlook.
(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)