Moody’s
Moody’s Ratings said on Wednesday that India would not suffer any damage from the American tariff and the Indian economy will remain strong. Moody’s said, “India’s large domestic economy, low dependence on exports and promotion of domestic consumption, expanding manufacturing capacity and increasing spending on infrastructure will help reduce global trade risks.” This will reduce inflation and support strong banking liquidity.
Damage to Pakistan
In his report on emerging markets, Moody’s said that India’s internal growth drivers are providing stability to the economy amidst American policy changes and global uncertainty. The report said that the recent tension between Pakistan and India is likely to have a more negative impact on Pakistan’s growth than India.
Why is our economy strong?
The report said, “The Central Government’s spending on infrastructure is supporting GDP growth, while personal income tax cuts are increasing consumption. India’s limited dependence on goods and its strong service sectors are mitigen for American tariffs.” It further states, “If business talks lead to less tariffs on India than other emerging markets, India-made goods can also benefit from increasing American demand. Despite global instability, India’s strong banking market and stable debt conditions underline its economic strength.”
Capital investment will be attracted here
However, Moody’s warned that further decline in global economic and debt conditions will also have a negative impact on India. Meanwhile, the rating agency hoped to attract significant capital investment from the strong demand for electricity, transport and digital infrastructure in India over the next five to seven years. It states, “Most of the American tariffs are likely to reduce the impact on sub -sectors, as they mostly meet the domestic demand and benefit from the supporting regulatory or contractual arrangements.”
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