Rating agency Moody’s said Thursday that the Indian economy is expected to have grown by little more than 5.5% in the last quarter, and an initial spike in investor sentiment after recent reforms has faded and the “reality of India's deep-seated structural problems” has begun to set in. The reforms proposed by the government may help reduce the key risks facing the economy but cannot lift the near-term outlook, Moody’s said, while adding that the economy is growing well below its long-term potential.
It, however, said that the growth rate could be near the bottom of its current downward cycle. The country’s GDP numbers for the July-Sept quarter will be announced on November 30. Moody’s said that the growth rate for that quarter could be “a little more than 5.5% year-on-year, roughly the same as in the first two quarters (of calendar year 2012) but substantially below where GDP was 12 months ago.”