India’s growth 7.5 per cent remain stronger than global average

Standard & Poors credit rating for India stands at BBB-. Moodys rating for India sovereign debt is Baa3. Fitchs credit rating for India is BBB-. While China’s rating by S&P AA-, Moores Aa+, Fitchs A+ and United Kingdom, S&P AAA, Moores AA1, Fitchs AA+. United States S&P AA+, Moores Aaa, Fitchs AAA. In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of India thus having a big impact on the country’s borrowing costs.

Recent policy and budget announcements, support Moody’s expectation that India’s growth will remain stronger than the global average, and more robust than the median for similarly rated sovereign. A week after it revised its outlook on India to positive from stable, international credit rating major Moody’s pegged India’s growth at 7.5 per cent for 2015.

‘India’s economy is on a cyclical upswing. Forward looking indicators suggest domestic demand is gathering momentum,’ said Faraz Syed, associate economist, Moody’s Analytics.

According to the ratings agency, low inflation rate has enabled the Reserve Bank of India (RBI) to cut interest rates by 50 basis points in early 2015 which has helped in easing pressure on the private sector.

‘Lower rates as well as the government’s infrastructure and disinvestment programs should provide a boost to domestic-oriented industries,’ said Syed.
Rajan has projected a 7.8 per cent growth for the current fiscal year, subject to a normal Syed further said that the rating agency’s analysis suggests that the country’s first quarter GDP (gross domestic product) growth will be around 7.3 per cent on a year-on-year basis.

The growth projections come soon after Moody’s had revised India’s sovereign ratings outlook to positive from stable. Another ratings agency Fitch had reaffirmed its stable outlook on India.

The think-tank of rich nations, the Organisation for Economic Cooperation and Development (OECD), also endorsed high growth prospects for India.

Similarly, the Asian Development Bank (ADB) has also projected the country’s growth at 7.8 per cent in 2015-16 and at 8.2 per cent in 2016-17. On April 14, the World Bank had forecast India’s growth accelerating to 8 per cent in the next fiscal.