‘Even in the current global turmoil, India’s cost of borrowing is lower than countries that have better ratings than India’
‘Even in the current global turmoil, India’s cost of borrowing is lower than countries that have better ratings than India’
Chief Economic Adviser V. Ananth Nageswaran said India is facing global shocks with a position of strength backed by better domestic, corporate and financial sector balance sheets and has a good medium-term growth outlook.
Speaking at an event organized by the National Council of Applied Economic Research, he said, “Overall, all things considered including oil price risks, I am confident that the external situation will be manageable, with certainly some worrying things to come.” With moments.” (NCAER) here.
He further said that looking at all the short-term unknowns, it is better to focus on the medium-term prospects and what lies ahead of the country in the next six years to 2030.
“The medium-term growth outlook is actually very constructive as we have paid off our growth dues over the last decade and that was because we had to repair the balance sheets in the financial and non-financial sector. We are fortunately global. We are facing setbacks. Better domestic, corporate and financial sector balance sheets,” he said.
On the high debt-to-GDP ratio, Mr. Nageswaran said, it is sustainable as India’s macroeconomic fundamentals remain strong.
He said that even in the current global turmoil, India’s cost of borrowing is low as compared to countries which have better ratings than India.
“India’s bond yields have not really risen. It is doing better than countries with better credit ratings than India. This tells us a little bit about the overall macroeconomic stability in the current circumstances,” he said.
He also said that the country’s current account deficit could range between 3-3.5% during the current fiscal depending on external factors.
With regard to the medium-term outlook for growth, he said, it would be closer to 6.5-7% instead of closer to 6%, with a baseline scenario of oil below $100 a barrel.
He said this growth would be driven by massive capital formation and strong public digital infrastructure to formalize the economy.