Worst may be over for Indian economy, says rating agency
The Indian economy will slowly improve across 2014, but not hit its potential until well into 2015, Moody’s Analytics has said.
Indicating that the worst may be over for the Indian economy, Moody’s Analytics pegged the growth forecast in the 5 to 5.5 per cent range through 2014, before rising to 6 per cent in 2015.
The stream of bad news emanating from the Indian economy has finally begun to ebb, Moody’s Analytics, a division of Moody’s Corporation that is engaged in economic analysis and research, said in a report.
Turning the corner
The report titled ‘India Outlook: Steady Growth, Lower Risk’ highlighted there is growing list of reasons to believe that the Indian economy has started to turn the corner, albeit slowly, after 30 months of sub-par growth.
A pick-up in exports and normal monsoon besides the prospect of a better Government after the May election have boosted business sentiment and investor confidence.
“Economic growth has stabilised and downside risks have fallen. This year the economy should perform better than in 2013, but it will be a long time before India’s economy grows back at its potential”.
Externally, the global economy is stabilising with better growth expected in 2014.
Both the World Bank and International Monetary Fund have said that the world economy is showing signs of bouncing back this year. While the World Bank has forecast global growth of 3.2 per cent, the IMF has now projected global growth to be higher at 3.7 per cent in 2014. For 2015, IMF sees global growth at 3.9 per cent.