Praising the government's "long game" handling of the economy to push up growth potential while giving attention to immediate issues as well, International credit rating agency Standard & Poor's (S&P) has forecasted that India’s economy can grow at about 8% in the next two years.
S&P Global Ratings further said, that the prediction of 8% growth is based on the steady, ongoing structural reform push, including GST passage, a good monsoon season this year and a wise choice to head the Reserve Bank of India. S&P appreciated the government's attempts to spur growth, saying that the authorities also clearly have their eye on the 'long game' with reforms to boost growth potential getting at least as much attention as short-term stimulus."
Pointing to inflationary pressures the report said that Inflation has been drifting higher with global commodity prices. It also noted that India does not face any fiscal or external sector concerns, pointing out that even Brexit did not have a meaningful impact on external variables. It added that the structural reform drive continues to gain traction. Consumer confidence looks quite high and investor confidence seems buoyant. Any China wobbles will affect India less than most countries in the region.
The S&P’s 8% growth rate is way above the forecasts done by other international agencies, including International Monetary Fund and Asian Development Bank. IMF has forecast 7.4% growth for this fiscal, while ADB expects India to grow 7.4% this year and 7.8% in 2017-18.