Categories: Business

India growth potential at 6.5 to 7% says S&P

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GDP growth

new Delhi. India's economy is expected to grow at a rate of 6.5 to seven percent in the medium to long term. But in order to improve the situation in view of the setbacks this year, the country will have to move fast in reforms in economic policies and programs. Global ratings agency S&P on Friday said this. A few days after India's credit rating was ranked at the lowest in the investment category for the 13th consecutive year, S&P said in a webinar on Friday that the domestic economy will outperform its counterparts despite the country's GDP growth rate likely to decline this year .

Andrew Wood, director of S&P and chief credit analyst for Asia-Pacific, said the global economy is going through a difficult period. Despite the contraction in the economy this year, India has performed better in its group of counterparts. "S&P has forecast a five per cent decline in the Indian economy in the current financial year. While it expects that the country's economic growth rate will improve to 8.5 percent in the next financial year. However, it says that if the Kovid-19 crisis causes more damage to the economy's infrastructure, it could further reduce India's credit rating.

"If the pandemic damages the infrastructure of India's economy, we will consider putting its rating in the lower category," Wood said. India is not the only country to be affected by this crisis. We are in an unprecedented time and the pace and strength of reforms will be paramount to determine ratings in the future. "The lockdown has been going on since March 25 in the country. However, relief is being given since 4 May. But it has broken the backbone of the country's business. Wood said that the country has the potential to grow at a rate of 6.5 to seven percent annually in the medium to long term. High growth rate is essential to maintain credit rating. Reforms are important to bring the country's economy back on track. He said that it would be important to improve in terms of employment. While the unorganized sector will take time to get back on track.

This post was published on June 13, 2020 4:45 am

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