S&P Global Ratings has said the India story is “pretty solid“ and praised the government's “long game“ handling of the economy to push up growth potential while giving attention to immediate issues as well. Its forecast of 8% growth for the current financial year and the next is, however, contingent on the government taking certain measures, including a “wise choice“ to head the Reserve Bank of India, the American ratings agency said. Raghuram Rajan's three-year term as governor ends on September 4. “That view (8% growth) is predicated on the steady , ongoing structural reform push including GST (goods and services tax) passage, a good monsoon season this year, and a wise choice to head the Reserve Bank,“ S&P said in its latest `APAC Economic Snapshots' report released on Thursday .
S&P has reposed more faith in the domestic economy than both International Monetary Fund and Asian Development Bank. IMF has forecast 7.4% growth for this fiscal as well as the next while ADB expects India to grow 7.4% this year and 7.8% in 2017-18. “The macro and structural stories remain pretty solid. Strong consumption growth continues apace, the external accounts look reasonably resilient post-Brexit, and fiscal policy looks prudent,“ the report said.
S&P appreciated the government's attempts to spur growth. “The authorities also clearly have their eye on the `long game' with reforms to boost growth potential getting at least as much attention as short-term stimulus,“ the report said while pointing to inflationary pressures. “Inflation has been drifting higher with global commodity prices,“ it said.
Chief economic adviser Arvind Subramanian had also said that India could manage 8% growth.“We are already growing at over 7%.Growth of 8% or more is eminently doable, subject to the international environment being cooperative,“ he said.
S&P said India does not face any fiscal or external sector concerns, pointing out that even Brexit did not have a meaningful impact on external variables. “The structural reform drive continues to gain traction. Consumer confidence looks quite high and investor confidence seems buoyant...Any China wobbles will affect India less than most countries in the region,“ the report said. The only thing missing is the investment pickup, it said.
S&P has reposed more faith in the domestic economy than both International Monetary Fund and Asian Development Bank. IMF has forecast 7.4% growth for this fiscal as well as the next while ADB expects India to grow 7.4% this year and 7.8% in 2017-18. “The macro and structural stories remain pretty solid. Strong consumption growth continues apace, the external accounts look reasonably resilient post-Brexit, and fiscal policy looks prudent,“ the report said.
S&P appreciated the government's attempts to spur growth. “The authorities also clearly have their eye on the `long game' with reforms to boost growth potential getting at least as much attention as short-term stimulus,“ the report said while pointing to inflationary pressures. “Inflation has been drifting higher with global commodity prices,“ it said.
Chief economic adviser Arvind Subramanian had also said that India could manage 8% growth.“We are already growing at over 7%.Growth of 8% or more is eminently doable, subject to the international environment being cooperative,“ he said.
S&P said India does not face any fiscal or external sector concerns, pointing out that even Brexit did not have a meaningful impact on external variables. “The structural reform drive continues to gain traction. Consumer confidence looks quite high and investor confidence seems buoyant...Any China wobbles will affect India less than most countries in the region,“ the report said. The only thing missing is the investment pickup, it said.
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