There is no room for complacency or jubilation despite the rating upgrade provided by Moody’s Investor Services, given the many challenges that still remain to be addressed on the Indian macroeconomic front, Ajit Ranade, Chief Economist of the Aditya Birla group, said.

While the view from outside is sanguine, there are many concerns that are visible. For instance, bank credit growth is at 6 per cent, a 60-year low, while fixed capital formation has been low and job losses have been increasing, he said while speaking at the fourth annual conference on ‘Reset Corporate Treasury’, hosted by Almus Risk Consulting. Export growth and reviving industrial manufacturing will be key to lifting the economy from its current state, he said.

Industrial growth is expected to move up to 4 per cent next year but it has to go to 10 per cent and that can’t happen without exports growing at 15 per cent. “Export growth is the thermometer that tells you if the economy is picking up,” he said.

Speaking to a gathering of bankers, corporate treasury heads and dealers, Ranade cautioned them on the rising risk levels in different parts of the economy.

Oil prices have gone up 40 per cent in six months from about $43 a barrel in June to about $63 currently.

There are expectations that it may reach $70 a barrel, and that would have an impact on the inflationary situation and on the fiscal deficit.

Imports, he said, have grown recently at nearly 40 per cent and this was not on account of oil or gold but manufactured goods.

Current account deficit had moved up and it was no longer in the very comfortable zone.

Besides, he pointed out, if banks are reluctant to extend credit but the bond market is booming, then one has to look at whether the risk has shifted to the bond market?

“You need to be vigilant and not let risk out of sight,” he said, even as mixed signals come from various directions and corporates need to sift through the noise.

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