Growth expectation of Indian economy at 12%: Moody Analytics

Indian economy experienced a 7.5 percent decrease in the past three months of last year. In the December quarter, the GDP growth amounts to 0.4 percent which is better than expected.

According to Moody Analytics, the Indian Economy is likely to grow by 12 percent.

There was an improvement in the manufacturing production in the latest months with the ease in restrictions. Furthermore, the external and domestic demands escalated.

The existing fiscal and monetary policy will contribute to the growth of the economy.

Meanwhile, the repo rate is also not likely to change shortly.

There might be an increase in private consumption and non-residential investment in the coming quarters. This would result to build up the domestic demand in the current year.

The budget for fiscal 2021-2022 mentions the expenditure in infrastructure which will follow up the betterment in the employment opportunities. All the contents of the budget for this year lead to a presumption of reduction in the fiscal deficit.

Household disposable income can be difficult to maintain with the increase in the prices of food and fuel. Although, inflation is not anticipated to grow further in 2021.

Besides, the analytics added that the focus should be to take timely control over the second wave of Covid- 19.

The majority of the states are recovering well which increases the possibility to control the spread at an early stage.

In case if it spreads at an increasing rate the government would probably impose limited time curfews or lockdown.

The prominent aspect to develop the situation is the vaccination drive execution. Till now the total vaccination has reached the 35 million mark.

In conclusion, timely reaching the forecast to reach herd immunity could help to reduce the spread.

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