Indian economy is expected to pick up pace in 2015, and grow in the range of 5-6 per cent, helped by strong domestic demand, rating agency Moody’s said on Wednesday.
“India will have stronger GDP growth in 2015, which we forecast at 5-6 per cent, up from around 5 per cent in 2014,” Moody’s said in a report titled ‘2015 Outlook: Global Credit Conditions’.
The country, it said, had enefited from a strong domestic demand base and diversified export markets that gav protection from the effects of a slowing Chinese economy and muted growth in the eurozone and Japan.
“Employment and consumption are likely to rise in India, and the fall in global commodity prices will help to lower high inflation in the country,” Moody’s said.
As per official estimates, economic growth in the current fiscal ending March, 2015, would be between 5.4 and 5.9 per cent. The growth had slumped to sub-5 per cent in the earlier two consecutive fiscals.
It also projected that corporates would see improved cash flows on account of acceleration in manufacturing activity.
However, Moody’s outlook on the banking system remains negative as it expects poor asset quality to require continued provisioning and strengthened capital buffers.