India to be the fastest growing economy in 2017: Moody's

Moody's Investors Service has reckoned India to be the fastest growing economy in 2017, leaving behind other G-20 countries such as the US, Germany, and others.

Expecting a 7.1 per cent growth for the Indian economy in FY17, Moody's has rated India sovereign at 'Baa3' with a positive outlook. In its report, Moody's also said the government will most likely achieve its fiscal deficit target of 3.5 per cent of GDP of the FY16. The rating agency is expecting the growth rate to recover from the demonetisation knock down, post the second and third-quarter.

Besides the blow from the recent reform policies, the economic and institutional reforms and the completion of various projects is expected to contribute and escalate the growth rate of the economy. Higher commodity prices and capacity add-ons will prospectively add to the growth.

However, higher interest rates on account of rising inflation and volatility in the exchange rate might stump Moody's forecasts. The world geopolitics may also take a toll on the growth rates. Uncertain trade and immigration policies of the US, risks of a steep deceleration in China and the political instability in EU may dampen the growth.