Moody’s Analytics warned that efforts to push the economy back up towards double-digit levels without commensurate reform initiatives to fix the structural problems in the economy like infrastructure bottlenecks would be ill advised.Photo: AFP
Live Mint : Asit Ranjan Mishra :Fri, Mar 08 2013. 01 16 AM IST
New Delhi: Moody’s Analytics said on Thursday the worst is over for India. Conceding that 2012 was a tough year for the nation, it has forecast that economic growth will bounce back to around 7% from 2014.
“Our forecast from 2014 onwards is for economic growth of around 7%, which is India’s new rate of trend growth. This is well short of the rate near 10% from a couple of years back,” the advisory said.
It warned that efforts to push the economy back towards double-digit levels without commensurate reform initiatives to fix structural problems in the economy such as infrastructure bottlenecks would be ill advised.
“Policymakers should end any pretence that the economy can grow at 10% without fanning inflation—it simply can’t,” it said. “Anything above 7% will lift inflation and result in a more painful future adjustment.”
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