Finance Ministry Responds To Change In Moody’s India Ratings Outlook
The fundamentals of the Indian economy remain quite robust and series of reforms undertaken recently would stimulate investments, the government said Friday, in response to Moody’s Investor Service cutting its India outlook to negative.
The sharp slowdown in growth and a surprise corporate-tax cut will put government finances under pressure this year. Moody’s is projecting a fiscal deficit of 3.7 percent of gross domestic product in the year through March 2020, a breach of the government’s 3.3 percent target.
The finance ministry in a statement said India continues to be among the fastest-growing major economies in the world. "India's relative standing remains unaffected," it said citing International Monetary Fund's recent World Economic Outlook putting India’s GDP growth rate at 6.1 percent in 2019 and rising to 7 percent in 2020.
"As India's potential growth rate remains unchanged, assessment by IMF and other multilateral organisations continue to underline a positive outlook on India," it said. The ministry said the government has undertaken series of financial sector and other reforms to strengthen the economy as a whole.
"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," it said.
"The fundamentals of the economy remain quite robust with inflation under check and bond yields low. India continues to offer strong prospects of growth in the near and medium term."