Moody’s pegs FY’15 growth at 5.5%

February 24, 2014 03:16 pm | Updated May 18, 2016 10:41 am IST - Mumbai

A file picture of the signage of Moody's Corporation in New York.

A file picture of the signage of Moody's Corporation in New York.

Stating that the forthcoming elections will delay the reform process and hurt growth, international rating agency Moody’s on Monday said it expects growth to pick up to only 5.5 per cent in FY’15.

“We expect GDP growth to remain weak at 5.5 per cent in FY’15 as the elections will delay reforms needed to revive growth,” it said in a note.

Growth has been below the trend for much of FY’14 and the government’s official estimate pegs it at 4.9 per cent, a bit higher than 4.5 per cent achieved in FY’13. Elections are scheduled for April-May.

It said interest rates will continue to remain high and hence the rupee will continue to be volatile, making it difficult for importers and exporters.

The agency also gave a negative outlook for non-financial corporates in 2014 on weak economy, political uncertainty and effects of the US Fed’s tapering.

“Lower economic growth, volatile exchange rates, rising borrowing costs and slow economic reforms have dampened prospects across many sectors,” it said in the report prepared with its local counterpart ICRA.

It specifically said domestically focused sectors like real estate, cement, automotive, steel, metals and mining, and retail which are dependent on “vagaries of regulation and policy-setting” have negative outlooks.

Others like exploration and production, IT/business process outsourcing and pharma which are linked to developments in the external sector are comparatively better placed, it said.

The report said pharma segment will benefit from patent expiries in the US and gave a stable outlook for the sector.

For the telecom sector also it gave a stable outlook, saying earnings will improve on the back of consolidation and improved pricing power with operators. However, the entry of Mukesh Ambani-led Reliance Jio can temper the trend, it cautioned.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.