Saturday, 4 December, 2021

S&P sees indications of strong rebound in Indian economy after Q1

NEW DELHI: Rating agency Standard & Poor’s (S&P) on Tuesday said high-frequency indicators suggest a strong rebound during the July-September quarter after a steep contraction in activity in the previous three months on the back of a severe Covid-19 wave.

However, it warned that domestic macro indicators remained weak, though recovering, report agencies.

In its latest outlook on Asia Pacific, the agency cautioned against the impact of faster-than-expected tapering, saying it could cause capital flow risks as monetary policy in India remains highly accommodative with real interest rates in negative territory.

It expected a hike in the policy rate by the Reserve Bank of India’s monetary policy committee by 25 basis points in the current fiscal year. The agency retained India’s economic growth projection at 9.5 per cent for the current fiscal year, but cut it for China by 0.3 percentage points to 8 per cent for 2021 on the Evergrande crisis and regulatory actions by the country to rein in private enterprises.