Credit rating agency Moody’s Investors Service on Wednesday reduced India’s growth rate of 2018 to 7.3 percent, earlier it had projected 7.5 percent growth rate in the comparable period.
The government will release GDP data on Thursday for the quarter ended March at 05:30 pm. Economic Affairs Secretary Subhash Chandra Garg had said on Monday that the expected annual increase in the March quarter was between 7.3 and 7.5 percent.
Moody’s has argued that the country’s economy is going through a cyclical recovery, but the costly oil and the weak financial position will be heavy on its growth. However, for 2019 it has maintained its estimate of 7.5 percent growth rate.
In an update of its Global Macro Outlook: 2018-19, Moody’s said that in 2018 we expect the growth rate to be around 7.3 percent, which is less than our previous estimate of 7.5 percent. The growth rate for 2019 will be maintained at 7.5 percent.
Moody’s said that with the support of high minimum support price (MSP) and normal monsoon, the rural consumption will accelerate and its will increase growth rate.
”The private investment cycle will continue to make a gradual recovery, as twin balance-sheet issues – impaired assets at banks and corporates – slowly get addressed through deleveraging and the application of the Insolvency and Bankruptcy Code,” it said.
Also, the new system of indirect taxes which is Goods and Service tax (GST) will be burden on growth for the next few quarters.