India’s economic growth will remain strong in the coming quarters while inflation is likely to remain at elevated levels, analysts at Standard and Poor’s (S&P) said on Wednesday.
S&P has a ‘BBB-‘ rating with a stable outlook on India.
The economy is expected to clock 9.5 per cent growth in the current fiscal year, followed by 7 per cent expansion in the next year, it said, adding high nominal GDP growth would be important for ensuring fiscal consolidation going forward.
“Given India’s weak fiscal settings and high stock of debt around 90 per cent of GDP, the nominal GDP growth is going to be very important to prevent any further erosion of fiscal settings in the country and to enable some degree of fiscal consolidation going forward,” S&P Global Ratings Director (Sovereign) Andrew Wood said.
He said the fiscal deficit would remain elevated over the next two years but debt to GDP ratio is expected to stabilise or flatten out.
Mr Wood further said India’s external position has strengthened in the context of the pandemic and India has been generating forex reserves at record pace.
