India projected to grow at 7.3% in 2019, 2020: Moody's

04 Mar '19

2 min read

India’s economy is likely to grow at 7.3 per cent in 2019 and 2020, and the government spending announced this year will support near-term growth, Moody's Investor Service said recently. India is less exposed to a global manufacturing trade growth slowdown than many other Asian nations and is poised to grow at a relatively stable pace in two years, it said.

Moody's growth estimates are based on the calendar year. India, however, measures its economic growth on the basis of the April-March financial year.

The announcement in the interim budget 2019-20 on direct cash transfer programme for farmers and the middle-class tax relief measures will contribute a financial year stimulus of about 0.45 per cent of the gross domestic product, the US-based rating agency said in its quarterly Global Macro Outlook for 2019 and 2020.

The Reserve bank of India (RBI) is likely to be able to maintain its current monetary policy stance after some tightening last year, it said, adding that though the overall strength of the banking system is improving, it remains a constraint on the economy, according to a news agency report.

"However, a complete turnaround of the banking system requires more time amid slower-than-expected resolution of legacy problem loans," it said.

With range-bound oil prices, export growth has outpaced import growth for the last two years. Fiscal spending on infrastructure and the rural economy should continue to support domestic activity, Moody's added. (DS)

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