S&P's stable outlook: India entering faster than expected growth mode, say experts

Mumbai: Welcoming Standard and Poor’s (S&P)move to revise the country outlook to stable from negative,market experts today said the country is entering into fasterthan expected growth mode.

Commenting on the outlook revision, SBI ChairpersonArundhati Bhattacharya said, “We believe that the country iswell on a path of faster than anticipated fiscal consolidationand it could be a positive surprise going forward.”

Japanese brokerage firm, Nomura, said that a stablegovernment and “proactive policy measures to strengthen thecountry’s macroeconomic fundamentals should help put theeconomy back on a high growth trajectory”.

Nomura expects the country’s real GDP growth to risefrom 4.7 per cent in FY14 to 6 per cent year-on-year in FY15and 6.8 per cent in FY16.

Care Ratings chief economist Madan Sabnavis said that thechange in outlook is a “pleasant surprise”, but for actualrating to change economic variables have to improve and at afaster pace.

Global rating agency also affirmed the country’slong-term credit ratings at ‘BBB-’ and short-term at ‘A-3’.It said the outlook revision reflects that thecountry’s improved political setting offers a conduciveenvironment for reforms, which could boost growth prospectsand improve fiscal management.

“The ratings reflect the country’s strong externalprofile, combined with its democratic institutions and freepress, both of which underpin policy stability andpredictability,” S&P said.

S&P said it could raise the rating if the economyreverts to a real per capita GDP trend growth of 5.5 per centper year and fiscal, external, or inflation metrics improve.

“With the rating institution indicating a revision inrating conditional on a growth uptick and our internalprognosis suggesting a strong possibility of the same, we lookforward to even better times ahead,” Bhattacharya said.

PTI