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India is projected to grow by 6% in the current fiscal while growth is expected to be steady in most of the Asia Pacific economies, global rating agency Standard & Poor's said today.
It, however, cautioned that a weaker global risk appetite and a poor monsoon would pull down growth to around 5% in 2013-14 fiscal.
"For India, a downside scenario featuring a combination of weaker global risk appetite and a poor monsoon seasons would pull growth down to around 5% in 2013 ... Upside growth would reach 6.5% in 2013," S&P said in its report. It also said that there is softer traction in some Asia Pacific economies but growth expected to hold steady.
S&P's growth projection is lower than the government's estimate of 6.1-6.7%. It is, however, higher than RBI's projection of 5.7%.
For 2014-15 and 2015-16 fiscal, S&P projected the economic growth to pick up at 6.7% and 7% respectively.
"India's growth forecast has been lowered to 6% in 2013 and 6.7% in 2014 on weaker consumption and exports," it said.
"S&P's base case outlook for Asia Pacific is that growth in most of the region will hold steady or pick up slightly in 2013 and 2014, after having slowed sharply in 2012. The upside potential for the region is characterised by a stronger than expected global recovery, boosting trade and growth in Asia," the report said.
Citing positive economic trends in the Asia Pacific in the second half of 2012, the rating agency said that however India was an "outlier" as the country saw falling growth during that period.
"... Growth and exports generally picked up in the second half of 2012 on the back of more positive global developments, especially in the US.
"This was particularly true in the more open newly industrialised economies as well as in Thailand (owing to base effects from flooding a year earlier). India was the outlier, with growth continuing to decline," it noted.
S&P also said the euro zone's debt crisis continues to be a key risk for global credit conditions in 2013 and 2014 as the European economic engine continues to falter.
"We now forecast that the euro zone stays in recession this year followed by anaemic recovery in 2014, instead of in the second half of this year," the report added.
