Moody's estimates India's real GDP to grow at 7.2% in FY 2018-19

Updated:1 month, 2 weeks ago IST

New Delhi, Dec 03 (ANI): Moody's Investors Service's annual Banking System Outlook on India estimated the country's real gross domestic product (GDP) for the current financial year and next fiscal to grow at 7.2 per cent and 7.4 per cent, respectively. In its banking system outlook published on Monday, the global rating agency stated that the growth will be driven by investment growth and strong consumption. It also stated that the operating environment will be stable, supported by robust economic growth. Moody's added that asset quality will remain stable, but weak as cleanup of legacy problem loans nears completion and corporate health improves. It said that corporates' financial health will limit new NPL formation while adding that stress among NBFIs is a risk. Moody's also noted that capitalisation at public sector banks will remain weak but government support will provide relief. "Public sector banks will continue to grapple with weak capitalisation and depend on government capital injections to meet minimum capital requirements," it added. The report also mentioned about Net interest margins (NIMs) while stating that profitability will improve but remain weak due to high credit costs. Affirming that funding and liquidity will remain strong, the report added. Government support for public sector banks will remain strong. Capital infusions over the past few years for all public sector banks facing capital shortfalls and other government measures, provide strong support for our assumption of very strong government support for public sector banks," it added.

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