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Moody’s pegs India’sFY20 GDP growth at 5.8%
Why is it in the news ?
- Moody's Investors Service cut its growth forecast for India for the fiscal year that began in April to 5.8% from 6.2%.
- As per the Moody's, a weaker growth outlook will dampen the prospects for fiscal consolidation.
More in the news
- Moody's projection is lower than 6.1 per cent that the Reserve Bank of India (RBI) had forecast just last week.
- Moody's attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation.
- From Moody's:
(1) Compared with only two years ago, the probability of sustained real GDP growth at or above 8% has significantly diminished.
(2) The fiscal deficit would be equivalent to 3.7% of gross domestic product this fiscal year, compared with the government's target of 3.3%, given New Delhi's decision to cut the corporate tax rate.
(3) A long period of weak growth will hamper the government's fiscal consolidation plans.
- About Moody's:
(1) Moody's is a global rating agency.
(2) Moody's Corporation is the holding company that owns:
- Moody's Investor Services, which rates fixed income debt securities.
- Moody's Analytics, which provides software and research for economic analysis and risk management.
(1) Moody's assigns ratings on the basis of assessed risk and the borrower's ability to make interest payments, and its ratings are closely watched by many investors.
Source
The Hindu.