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

Reform first, privatise later: Bibek Debroy to railways

Before privatisation and corporatisation, the Indian Railways need to undertake major reforms including commercial accounting, decentralisation and human resource among others, said Bibek Debroy, economist and member, NITI Aayog at Railways Reforms and Governance Conclave organised by Governance Now on Fri

NTPC plans for 32 GW installed capacity via renewable sources

NTPC Ltd has raised Rs 2,000 crore through green masala bonds in overseas market under its $4 billion medium term note programme, union minister Piyush Goyal informed the Lok Sabha. The proceeds of these bonds will be used for financing renewable energy projects in accordance with applicable

Big test for Palanisami

It’s been over a month since the power centre in Tamil Nadu shifted from Poes Garden to Greenways Road in Chennai. The thirteenth chief minister of the state, Edappadi K Palanisami, is taking baby steps to bring about a change in the state which has been battling political uncertainty for the past fe

A trowelful of empowerment

When her husband died last year, 60-year-old Chakkamma was not sure whether she would be able to have some money of her own: she has a son who looks after her, but she wanted to maintain a degree of independence. Opportunity came knocking when the Tamil Nadu government, as part of its Pudhu Vaazhvu (or new

Should Shiv Sena MP Ravindra Gaikwad be arrested for assaulting an Air India employee?

Should Shiv Sena MP Ravindra Gaikwad be arrested for assaulting an Air India employee?

Railways suffered over Rs 33,000 crore loss on passenger service: CAG

  The Railways was unable to meet its operational cost of passenger and other coaching services. During 2014-15, there was a loss of Rs 33,821.70 crore on passenger and other coaching services. The freight services earned a profit of Rs 38,312.59 crore which indicated that 88.28 percent

Video

जानिए क्यों ये किसान अर्धनग्न अवस्था में बैठे हैं जंतर मंतर पर

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter