With an increase in global commodity prices, the Reserve Bank of India might feel the pressure to tackle inflation sooner than it had expected.
As per the report of S&P Global Ratings, India will grow 9.8 percent in the current fiscal year 2021-22 (ending on March 22) and stay above trend to achieve the target of 7.8 percent growth in fiscal 2022-23. Andrew Wood from the agency said that higher energy and electricity costs could crimp the buoyancy of private consumption and most probably eliminate any negative possibilities; otherwise string economic recovery is witnessed by India.
Further, he added that on the external front, India became a net external creditor country in the context of the pandemic, alongside a quicker foreign exchange reserves accumulation. Hence, this is going to act as an additional buffer for its credit ratings for the time being.
