NEW DELHI: Indian economy will grow at 7.5 per cent in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices, Moody’s Investors Service said today.
The firm, however, warned the generally robust economic environment is constrained by “banks’ balance sheet repair and elevated corporate debt, and corporate pricing power being limited by the impact on food price inflation and household budgets of two consecutive droughts.”
In its report ‘Global Macro Outlook 2016-17 — Global growth faces rising risks at time of policy constraint’, Moody’s said growth will fail to pick up steam over the next two years as the slowdown in China, lower commodity prices and tighter financing in some countries weigh on the economy.
“Together with Turkey and China among the G20 emerging markets, India benefits from lower commodity prices: in 2014, net commodity imports amounted to 5.9 per cent of India’s GDP, compared with net exports worth 1.3 per cent, 3.3 per cent and 4.3 per cent for South Africa, Brazil and Indonesia respectively,” it said.
