S&P raises India's growth forecast for 2009 to 5.8-6.3%
Press Trust of India / New Delhi Aug 13, 2009, 16:58 IST
Rating agency Standard & Poor's (S&P) today forecast India's economic growth to rise by 30 basis points to 6.3 per cent for the current fiscal owing to the stimulus measures the government had taken and improvement in global conditions.
The agency had earlier said that the economy would grow at the rate of 5.8 per cent.
In a teleconference, S&P said the revision was occasioned because of the positive policy responses by the country and improving global conditions, despite the deficient rains and lurking swine flu.
"We are now beginning to see impact of stimulus measures. Strength of the domestic market will help India maintain a respectable growth," S&P Chief Economist Subir Gokarn said in the call.
The impact of monsoons is still to be assessed, he said, but held that "the growth in industrial production would be able to offset the low growth in agriculture production." The swine flu pandemic would not affect growth much, he said, as "precedence shows that pandemic and health scares do not have much of an impact on the macro-economy".
The Index of Industrial Production for June released yesterday showed a "positively shocking" 7.8 per cent growth against 5.4 per cent in the month a year ago, signalling recovery of the economy.
"If yesterday's number is anything to go by, credit offtake in the coming days would be much better than anticipated. But if the previous two months' trend continues, rate of recovery would be moderate," he said.
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