The much-awaited GDP data brought good news for the Indian economy. According to the latest statistics, India retained its tag of world's fastest growing economy. India surpassed China and registered the growth rate of 7.7 per cent from January-March quarter.
India's GDP or gross domestic growth rose to 7.7 per cent in the March quarter as against 5.6 per cent , 6.3 per cent and 7 per cent respectively, in the first three quarters of 2017-18. Economists had estimated the March quarter GDP growth number at 7.3 per cent, according to a Reuters poll.
Economists expect the economy to grow more than 7 per cent in 2018-19 over support of normal monsoon.
However, global credit agency Moody's lowered India's growth forecast in 2018. Moody's on Wednesday slashed India's GDP growth forecast to 7.3 per cent in 2018, from previous forecast of 7.5 per cent due to higher oil prices and tighter financial conditions.
"The Indian economy is in cyclical recovery led by both investment and consumption. However, higher oil prices and tighter financial conditions will weigh on the pace of acceleration. We expect GDP growth of about 7.3 per cent in 2018, down from our previous forecast of 7.5 per cent," the report said.
Discussing about the new Goods and Service Tax regime, Moody`s said that it could weigh on growth somewhat over the next few quarters, which poses some downside risk to its forecast, adding "we expect these issues to moderate over the course of the year." Last year in November, Moody's upgraded India's sovereign credit rating by a notch to 'Baa2' with a stable outlook citing improved growth prospects driven by economic and institutional reforms.
The rating upgrade comes after a gap of 13 years - Moody's had last upgraded India's rating to 'Baa3' in 2004.
In 2015, the rating outlook was changed to 'positive' from 'stable'.
The 'Baa3' rating was the lowest investment grade -- just a notch above 'junk' status.
"The decision to upgrade the ratings is underpinned by Moody's expectation that continued progress on economic and institutional reforms will, over time, enhance India's high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term," Moody's said.
