Standard and Poor’s lifts India, raises growth figures

GDP growth forecasts for China and Japan lowered

GN Bureau | February 26, 2015



On the eve of general budget, the ratings agency Standard & Poor’s has raised India’s growth forecasts.

It raised India GDP growth forecast to 7.9 percent from 6.2 percent for the year ending March 2016, due to rising investment and low oil prices. The agency also raised the forecast for 2016/17 to 8.2 percent from 6.6 percent previously.

The revisions come after the country changed its economic indicators and the way it is calculated.

“India should be the Asia-Pacific region’s bright spot,” S&P said in a statement. S&P currently rates India at “BBB-” with a “stable” outlook.

The agency earlier this week said India must boost growth, cut its fiscal deficit and fulfill promises of financial and fiscal reforms to justify an upgrade in a credit rating.

Meanwhile, the Standard & Poor's has lowered its GDP growth forecasts for China, Japan, and the Asian Tiger economies in a report "Stronger US economy and lower oil prices aren't boosting Asia-Pacific growth."

The twin factors of strengthening US economy and lower oil prices have yet to lift economic data in much of Asia-Pacific region.

Central banks have shifted their stance in recent months, with a critical group of monetary policymakers cutting rates or easing financial conditions and the remainder moving to a more neutral stance.

This runs contrary to what was observed until the latter part of 2014. Weaker growth in China and Japan may be weighing on overall sentiment.

Standard & Poor's trimmed GDP growth forecasts for China to 6.9% this year and 6.6% in 2016, from 7.1% and 6.7%, respectively.

"For Japan, we have lowered our growth forecast to 0.7% this year (from 1.3%) and 1.3% in 2016 (2.1% previously)," said Paul Gruenwald, Asia-Pacific Chief Economist.

"Japan is likely to struggle to achieve a meaningful uplift in growth this year, owing to base effects from the poor fourth-quarter performance in 2014. We believe growth and core inflation can gradually climb higher, now that the Japanese government has postponed the second leg of its consumption tax hike until early 2017."

"We now expect slightly lower real GDP growth in Asia-Pacific, but significantly lower inflation, higher current accounts, weaker currencies, and more accommodative monetary policy stances, despite our steadfast view that the US Federal Reserve will begin its long-awaited rate hikes this summer," Gruenwald said.

Comments

 

Other News

INS Kiltan commissioned into Indian Navy

 INS Kiltan, the third anti-submarine warfare (ASW) stealth corvette built under project 28 (Kamorta class), was commissioned into the Indian Navy by defence minister Nirmala Sitharaman at the naval dockyard in Visakhapatnam.    The anti-submarine warfare stealth corvet

SAIL`s special grade steel used to build stealth corvette

Maharatna enterprise, Steel Authority of India Ltd. (SAIL) has supplied defence grade micro-alloyed grade of steel (DMR 249A) steel plates for the indigenously built anti-submarine warfare (ASW) stealth corvette INS-Kiltan commissioned into Indian Navy.    SAIL’s integ

The mapping of India

 This is the 250th year since the inception of the Survey of India that has been mapping the boundaries since 1767. Archana Mishra spoke to Dr Swarna Subba Rao, former surveyor general of India, who retired in June this year.  He joined the department as a deputy superintending surveyor in 1983 a

An ODF experiment that succeeded

An experiment carried out to make Uttar Pradesh’s Bijnor district Open Defecation Free (ODF) succeeded due to an official’s innovative approach, noted a World Bank blog.   The blog “Compressed demand”: How Uttar Pradesh is making sure rural sanitation subs

Finding a diplomatic way through political instability

As an emerging global power and the most powerful state in South Asia, India has been perennially concerned about protracted political instability and resultant social turmoil in Afghanistan during the past few decades. Indeed, India’s engagement in the realm of development cooperation, since the o

Kashmir’s Bloody Money Trail

Till the National Investigation Agency (NIA) caught up with him in Delhi on August 17, 70-year-old Zahoor Ahmad Shah Watali, a businessman, was indeed one of the most powerful persons in Kashmir valley. He was known to wield enormous clout in the corridors of power, both in Srinagar and Delhi. His influenc



Video

Dhanteras today, know subh muhurat for shopping and puja

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter