Centre Responds To Moody's Shift; Projects Positive Outlook On Reforms

Economy

Responding to a statement by ratings agency Moody's about India's growth rate, the Finance Ministry said India's fundamentals on the economy remain robust

Written By Nisha Qureshi | Mumbai | Updated On:
Finance Ministry

Responding to a statement by ratings agency Moody's about India's growth rate, the Finance Ministry of India said India's fundamentals on the economy remain robust. "India continues to offer strong prospects of growth in near and medium-term," the Finance Ministry's response said after the Moody’s Investors Service has changed the outlook on the Government of India’s ratings to negative from stable while keeping the foreign-currency and local-currency long-term issuer ratings unchanged at Baa2. 

India responds to Moody's

In its response on PIB, the Finance Ministry said the Government of India has taken various decisions to bring reforms and strengthen the economy. 

"The Government has undertaken a series of financial sectors and other reforms to strengthen the economy as a whole. The government of India has also proactively taken policy decisions in response to the global slowdown. These measures would lead to a positive outlook on India and would attract capital flows and stimulate investments," the statement by the Indian Finance Ministry said. 

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India also said that the IMF has predicted a 6.1 growth rate for the Indian Economy and also said the country's potential growth rate has remained unchanged.

"India’s relative standing remains unaffected. IMF in its latest World Economic Outlook has stated that the Indian Economy is set to grow at 6.1% in 2019, picking up to 7 % in 2020. As India’s potential growth rate remains unchanged, assessment by IMF and other multilateral organizations continue to underline a positive outlook on India,"

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Moody's projection for India

Moody in its statement had said India's economic growth fell to 5.0% year-on-year in the June quarter, the slowest since 2013. It also projected increasing risks in the economy. "While government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown," Moody's stated. 

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