Mumbai : International rating agency Standard & Poor’s, which recently upgraded its outlook on the sovereign ratings, said today that the economic performance of the country could “disappoint optimists” through 2015, but will better over a longer-term as the government initiates bold reforms. “We believe that the country’s economic performance will disappoint optimists through 2015 but will likely be better than the fears of pessimists over the long-term,” Standard & Poor’s credit analyst Joydeep Mukherji said in a report.

In the commentary, which comes a day after exit polls predicted gains for the BJP in the Haryana and Maharashtra polls, Mukherji said Prime Minister Modi will not take any dramatic reform measures immediately but will wait to add as many states in the kitty first before ushering in reforms.

“Modi will seek to win as many state elections as possible, especially in the next two years, to gain seats in the Upper House and ease the passage of legislations,” he said.   The report indicated that price rise will continue being a problem and that inflation, which is restricting the Reserve Bank from loosening its elevated policy rates, will be at around 8 per cent for 2014 and cool down to 7 per cent in 2015.

“The combination of growing federalism and a rising middle class sets the larger political context for the economic policies the government is likely to pursue in the next five years,” he said.

S&P had last month upgraded India’s rating outlook to stable from negative citing “improved political setting” after the new government under Modi.

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