Moody's sees sustained, robust growth in India in next 2 years

International ratings agency Moody's on Monday said it expects India to witness "sustained robust growth" over the next two years.

"We expect sustained robust growth in the US, Britain and India over the next two years," Moody's Investors Service said in its quarterly Global Macro Outlook report issued in London. The agency has a "Baa3" rating with a stable outlook on India, which is the lowest in the investment grade. Its peers S&P and Fitch had flagged concerns over falling growth, high inflation, the high fiscal and current account deficits and a sense of 'political paralysis', among other factors and had also threatened to downgrade the country to junk status.

However, with the economic conditions improving, the country has been able to convince all the rating agencies' concerns and both S&P and Firch have upgraded their respective outlooks now. In an earlier note, Moody's had said it expected GDP growth to touch 5% in 2014 and accelerate in 2015. The country had two consecutive fiscals of sub-5 per cent growth, and the prospects have been looking up since the June quarter, when GDP growth accelerated to 5.7%.

However, there are concerns that the number will slip to around 5% due to a weak industrial growth. RBI Governor Raghuram Rajan had called the process of recovery as "uneven". At the global level, Moody's said the US growth was likely to accelerate as pent-up consumer and investment demand is realised. For the G-20 economies, it is expecting a GDP growth of around 3% in 2015 and 2016, after notching up 2.8% in 2014.