Moody S: India set to be fastest growing G20 eco: Moody’s


NEW DELHI: India will be the fastest-growing G-20 economy over the next few years, with manufacturing and infrastructure sectors expanding, but reforms and policy obstacles could hamper investment, global ratings agency Moody’s said on Tuesday.
According to the report, a large young and educated workforce, increasing numbers of small families and urbanization will boost demand for housing, cement and new cars. It said India is now the world’s most populous country and the world’s fifth largest economy, with its GDP projected to reach $3.5 trillion in 2022.
It also said government infrastructure spending will bolster the steel and cement sectors, while India’s net-zero target will spur investment in renewable energy energy. Greater production capacity will increase the competitiveness of rated companies in these sectors, which will have a positive impact on creditworthiness if they manage execution risks with financial discipline.
“While manufacturing and infrastructure demand is set to grow at 3-12% annually for the remainder of the decade, India’s capacity will still lag well behind that of China through 2030,” Moody’s said. “Leading companies will invest around $150 billion in additional capacity and will need access to multiple sources of funding to do so, but most rated companies can tolerate an increase in leverage,” the report said. However, it was pointed out that the bureaucracy could slow down the approval processes when obtaining licenses.

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