- India’s GDP growth is expected to slip further in the fiscal second quarter that extends from July to September.
- Narendra Modi and co. have been trying a slew of initiatives to boost growth, but they seem to be failing.
- Moody’s and a host of others have turned negative about the prospects of the Indian economy.
The Indian economy has lost its wheels this year as the Narendra Modi-led government has failed to address key issues ranging from unemployment, a slowdown in auto sales, and a banking crisis despite getting a landslide mandate in this year’s elections. India’s GDP growth was down to a six-year low of just 5 percent during the April-June quarter, prompting global agencies to slash the once fast-growing Asian nation’s growth forecast.
Moody’s, for instance, had slashed India’s GDP growth forecast to 5.8 percent last month from the earlier estimate of 6.2 percent. The credit ratings agency gave the Narendra Modi-led government another headache earlier this week when it downgraded its ratings outlook for India to “negative” from “stable.”
India bull Mark Mobius calls Moody’s action “erroneous”
However, not everyone believes that the Indian economy and the country’s GDP growth are on sticky ground. Mark Mobius, the founder of Mobius Capital Partners, told CNBC in an interview that the country is headed toward strong growth in the long run. The fund manager told CNBC:
I think Moody’s call was erroneous, I don’t think it was called for because I see tremendous growth coming in India going forward … I believe that a lot of the reforms are going to really begin to kick in and have a big impact on the economy going forward.
Mobius’ words should have come as a relief for officials in the Narendra Modi-led government who were quick to rebut Moody’s downgrade.