New Delhi: The government on Friday said the fundamentals of the economy “remain quite robust” with inflation under check after Moody's Investors Service changed its outlook on India's ratings to "negative" from "stable", citing increasing risks that the country's economic growth will remain lower than in the past.
In a statement, the government said India continues to be among the fastest growing major economies in the world and its relative standing remains unaffected. “IMF in their latest World Economic Outlook has stated that Indian Economy is set to grow at 6.1% in 2019, picking up to 7 % 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 government also listed out the reforms taken in the financial sector 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, adding: “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 near and medium term.”
Moody’s on Thursday said the outlook partly reflects government and policy ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high levels.
India's economy grew only 5.0% year-on-year between April and June, its weakest pace since 2013, as consumer demand and government spending slowed amid global trade frictions. The international ratings agency said it estimates that the country's growth slowdown is in part long-lasting while backing its other ratings for India.