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

New Delhi, Mar 1: Credit rating agency Moody’s on Friday said that India is poised to grow at a relatively stable pace in 2019 and 2020. “We expect India’s economy to grow around 7.3 per cent in both years,” the agency stated.
In its quarterly ‘Global Macro Outlook for 2019 and 2020’ report, Moody’s said, “While not immune, India is less exposed to a slowdown in global manufacturing trade growth than other major Asian economies and emerging markets. The government spending announced ahead of elections this year (due by May) will support near-term growth.”
The agency further said, “Indian household spending growth will remain stable. A recent positive development is a pickup in investment spending and exports, after weak growth in 2017. Ahead of the upcoming elections and amid financial distress among small farmers from prolonged low food price increases, the government included a special relief package for farmers in the interim budget. The budget also includes tax breaks for middle-class earners through tax rebates and an increased standard deduction.”
It added that “the direct cash transfer program for farmers and the middle-class tax relief measures will contribute a fiscal stimulus of about 0.45 per cent of GDP and “these measures will support growth through consumption over the near term.”
The Reserve Bank of India (RBI) cut its benchmark policy rate in February and changed the policy stance to “neutral” from “calibrated tightening.” The agency also noted that the “inflation measures have steadily declined since the middle of 2018. The headline inflation rate declined to only 2.04 per cent in January, largely because of declining food prices, even though core inflation at 5.6 per cent remains only slightly below the central bank’s target.”