India growth slowed significantly in first quarter

NEW YORK, June 15: An Indian official defended Asia’s third biggest economy, saying its expected growth rates and projects to boost internal trade and development do not warrant a junk status credit rating.
On Monday, Standard & Poor’s warned that India could become the first so-called BRIC economy to lose its investment-grade credit rating citing slowing economic growth and policy inaction for instituting economic reforms.
The rating agency cut India’s BBB-minus rating outlook to negative in April, meaning it expects to make a decision within a 6-24 month time frame. The news knocked India’s currency, the rupee and stocks lower.
“People are entitled to ask what are you going to do about delayed decisions, what are you going to do about second generation reforms,” Ashwani Kumar, India’s minister of state for planning, science and technology, and earth sciences, said yesterday.
“But I am appalled by the suggestion of S&P that India is compared with junk status,” Kumar told Reuters.
India reported its worst economic growth rate in nine years for the first quarter of 2012, marking a dramatic slide in world’s second fastest growing economy. Gross domestic product growth slowed to 5.3 per cent, from 9.2 per cent in the same period a year ago.
“I recognize that our last-quarter GDP growth figures at 5.3 per cent have not given us any comfort,” Kumar said during a visit to the United States.
He reiterated a government growth forecast of 7 per cent in 2012, and said that despite the difficulties of the global economic situation, India expected an average annual growth rate of 8.5 per cent between 2012 and 2017. (AGENCIES)

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