Growth will continue in the Indian economy
The country’s economy is moving in the right direction. Good news about India’s economy is coming from all over the world. From the US to Europe and from the IMF to the World Bank, everyone seems to be very positive about India’s economy. So many agencies have also increased the estimates of India’s growth rate. By the way, a global firm has also given suggestions about India’s economy. It also said that India’s credibility can increase further in the next two years. But the country’s government will have to do some major work. Let us also tell you which is the brokerage firm that has talked about improving India’s credibility and what the government has been asked to focus on in the next two years.
There may be further improvements in credibility
Rating agency S&P said that if the central government is able to prudently manage its finances and reduce the fiscal deficit to four per cent of gross domestic product (GDP), India’s rating may be upgraded in the next 24 months, or two years. Yiphern Phua, director (sovereign ratings) at S&P Global Ratings, said in a statement that for an upgrade in the rating, the general government (central and state) deficit would need to fall below 7 per cent of GDP. For this, the central government will have to take further steps. Phua said that if the central government is able to bring the fiscal deficit to four per cent of GDP, then we will consider upgrading its credibility after the next 24 months.
What is the fiscal deficit?
The central government estimates that the fiscal deficit will narrow to 5.1 per cent of GDP in the current financial year 2024-25, from 5.63 per cent in 2023-24. In May, the US rating agency had raised India’s outlook to positive from stable. However, it maintained India’s rating at ‘BBB-‘. Phua said that the Indian economy has registered an average growth of 8 per cent in the last three years, which has been made possible by domestic consumption and infrastructure investment. This has made a real difference at the ground level. He said that we see a growth potential of seven per cent for India in the medium term.
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India is regaining lost land
Lewis Kooij, chief economist (Asia-Pacific) at S&P Global Ratings, said India is the fastest growing economy in the Asia region. He said the impact of the global Covid-19 pandemic on Asian economies is behind us and growth is in the process of accelerating. Kuijs said we saw the global pandemic have an impact on the pace of growth, especially in countries like India. India is regaining lost ground and growing faster than it was four years ago.
