New Delhi: India will be the fastest growing economy among G-20 countries clocking a 7.1 per cent growth in 2017, Moody's Investors Service said on Thursday.
"India is forecast to have the fastest growing economy among all G-20 countries with growth put at 7.1 per cent for 2017, down from a previous expectation of 7.5 per cent because of the effects of demonetisation," Moody's said.
With regard to global growth, Moody's said continuing cyclical recovery in global economic activity with growth in G-20 countries picking up modestly to 3 per cent in 2017 and 2018 from 2.6 per cent in 2016, but potential shifts in US policy add uncertainty to this forecast.
"We note unusually high uncertainty around our global forecasts due to the wide range of outcomes that could arise from significant shifts in US policy on a number of domestic and international issues, including trade and immigration," Moody's VP and Senior Analyst Madhavi Bokil said.
Also there could be risks of a sudden and sharp deceleration in China and political and fragmentation risks in the EU and the euro area, Moody's said.
In the report titled 'Modest Acceleration in the Global Economy, but Shifting US Policies Inject Uncertainty', Moody's said there is a high risk of a significant protectionist shift in US trade policy and could inflict lasting damage to the global economy.
Regarding Asia, Moody's said China's economy stabilized around the official growth target of 6.7 per cent in 2016, but will likely continue to decelerate to 6.3 per cent and 6 per cent in 2017 and 2018.
Moody's expects that the US economy will get additional lift from a stimulative fiscal policy stance pushing growth above potential. Accordingly, Moody's has revised its real GDP growth forecast to 2.4 per cent in 2017 and 2.5 per cent in 2018, from 2.2 per cent and 2.1 per cent, respectively.
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