Sept 18 (Reuters) – Credit ratings agency Moody’s on Friday raised India’s real GDP growth forecast to 7% from 6% for the current fiscal, citing its resilience amid the Middle East conflict.
“Although we continue to expect India to grow faster than all other G-20 economies, as well as similarly rated emerging market sovereigns, risks remain”, it said.
The agency said elevated energy prices and El Niño-related food price pressures pose risks to inflation, consumption and growth.
Moody’s said India’s fiscal policy response to the Middle East shock had been muted, but warned that higher global energy prices could increase subsidy spending and pressure the government to provide additional support, while rising defence and infrastructure spending could constrain fiscal consolidation.
India’s economy grew 7.8% in the April-June quarter, government data showed last month, comfortably beating expectations as a surge in investment and manufacturing activity offset weakness in mining and consumer-facing services.
(Reporting by Urvi Dugar in Bengaluru; Editing by Sonia Cheema)
