PM concerned over Moody's forcast on economy

Prime Minister Manmohan Singh on Monday expresed concern over the downgrade of India economy by rating agency Moody's.

Prime Minister Manmohan Singh on Saturday said the downgrade of India's growth forecast by Moody's was a cause of concern but expressed hoped that India would better last year's 6.5 per cent economic growth.

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"It is a cause of concern but one should not draw unwarranted conclusions," Singh told reporters when asked to comment on ratings agency Moody's analysis of the Indian economy.

Moody's research arm had scaled down its forecast for the country's economic growth this fiscal to 5.5 per cent earlier this week.

However, Singh expressed hoped that India would better last year's 6.5 per cent of economic growth. "The fundamentals of Indian economy are strong.

Investments and savings are among the highest in the world. I am hopeful, we will do still better than 6.5 per cent growth performance of last year," the Prime Minister said.

Moody's Analytics had said India's GDP growth rate is likely to be 5.5 per cent this year, while in 2013 growth is expected to be 6 per cent, adjusted from 6.2 per cent earlier.

"There has been little policy response from either the Reserve Bank of India or the government and with global uncertainty dragging on, we see nothing on the horizon to lift the economy from its funk," Moody's Analytics Senior Economist Glenn Levine had said.