Effect of China slowdown on India negligible: Moody’s
The Chinese slowdown will have a negligible impact on India, credit rating agency Moody’s said in its recent report, citing reasons such as the country’s strong domestic market, accelerating economic growth and diversified source of funding. “By comparison (with other countries such as China, Japan and Australia), delinquencies in India will improve thanks to the country's accelerating economic growth,” Moody’s said in its Credit Outlook Report on Monday. In the past, too, the global agency had underlined that the Indian economy will be less hit by the Chinese economic equation, but had insisted that the Indian government should continue to focus on mitigating its impact by taking pro-industry initiatives, improving agriculture production, encouraging manufacturing and strengthening its domestic consumption of goods. But despite Moody’s projection, several industry analysts as well as the Reserve Bank of India (RBI) Governor Raghuram Rajan had reiterated that the Indian economy, too, will suffer one way or other. In January this year, stock market in India crashed. Last month, India’s merchandise exports slowed down for 15th month in a row, with no sign of turnaround visible in the near future, the Indian industry is experiencing the added fears. The initial interpretation of the Chinese economy bubble was limited only to itself as many economists predicted the world’s second-largest economy to remain isolated. But soon, Chinese stock exchange crashed globally, twice in a year, including in the US and Hong Kong, thereby giving the world a signal that the impact will be contagious and anything but restricted to a particular economic zone. Echoing the IMF MD., Christine Lagarde’s views that India still seems to be better placed in the global economic atmosphere, Moody’s too vouched for the considerable GDP growth of more than 7%, and a confident growth in the economy during the upcoming financial year as well. Moody’s also said that markets in the Asian economies including India will emerge over time, as it currently doesn’t have covered bond-specific legal frameworks.
March 21, 2016 | 04:00pm IST
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