INSUBCONTINENT EXCLUSIVE:
Higher financing costs, reduced credit availability contributed to lowering of forecast, Fitch said.Economic growth may become a casualty of
the tug-of-war between the government and the central bank
Fitch Ratings lowered its 2018 growth forecast for Asia's third-largest economy to 7.2 per cent from 7.8 per cent seen previously
The financial year runs from April to March
The forecast cut comes in the midst of a power struggle between the Reserve Bank of India and the government, after the finance ministry
pushed to have a greater say over the RBI's functioning."So far, the Reserve Bank of India has dismissed calls by the government to provide
emergency liquidity and to ease lending restrictions," the rating company said in its latest Global Economic Outlook
Higher financing costs and reduced credit availability contributed to the lowering of the forecast, it said.The central bank retained its
full-year growth forecast at 7.4 per cent on Wednesday and kept rates unchanged.Gross domestic product growth for the next year is seen at 7
per cent, Fitch said in the report
The sharp revision comes after growth in the latest quarter unexpectedly weakened to 7.1 per cent following back-to-back interest rate
hikes, a funding squeeze and subdued expansion in the farm sector.India is among the 11 countries that saw a cut in their growth projections
due to tighter financing conditions
The external sector was also a significant drag on overall gross domestic product amid steadily accelerating imports, Fitch said about India
-- the country it rates in the lowest investment grade.(: Rupee To Decline To 75 Per Dollar By End-2019, Says Fitch Ratings)"Interest rates
in India, Mexico, Indonesia and, most dramatically, Turkey are all much higher than we anticipated this time last year, and central banks in
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