NEW DELHI: Global financial services firm
Moody's Investors Service sees
fiscal deficit at 3.4 per cent of GDP in FY19.
The government plans to reduce fiscal deficit to 3.3 per cent of GDP in 2018-19 from 3.53 per cent a year ago. The fiscal deficit target for 2018-19 is Rs 6.24 lakh crore.
“There is a material risk to FY19 fiscal deficit,” said Gene Fang, associate managing director - Sovereign Risk Group at Moody's Investors Service in an interaction with ETNow.
Moody’s also sees India’s FY19 GDP growth at 7.3 per cent and 7.5 per cent in FY20.
Earlier, the Reserve Bank of India in its fourth bi-monthly policy review retained GDP forecast for 2018-19 at 7.4 per cent based on an overall assessment.
Economic Affairs Secretary Subhash Chandra Garg on Friday said the GDP growth is expected to be higher than the RBI’s projection of 7.4 per cent for the current fiscal, according to PTI.
The rating agency on Monday said that the recent cut in petrol and diesel prices by Rs 2.50 by the Centre is estimated to reduce the combined EBITDA margins of IOCL, HPCL and
BPCL by Rs 6500 crore during current fiscal.
The government's decision to reduce fuel prices is credit negative for the three rated OMCs,
Indian Oil Corporation Limited, Bharat Petroleum Corporation and
Hindustan petroleum Corporation because they cannot fully pass on higher
crude oil prices to consumers and their earnings will be negatively affected, Moody's said.
“We are not changing the entire rating outlook and now key factor is to watch fiscal position. Liquidity shock could mean broader concerns,” said Fang.