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24 Aug 2018
 |
| weak rupee(The Total Investment & Insurance Solutions) |
Corporate India is
facing increasing borrowing costs given the rise in bank lending rates,
potentially dampening industrial production and revival in domestic demand
going forward, says a report.
According to a Dun &
Bradstreet (D&B) report, high borrowing costs and weakness in rupee is
expected to impact corporates, while uncertainties in the global market has the
potential to derail the global growth story.
According to Arun Singh,
Lead Economist, Dun & Bradstreet India, while the borrowing costs for
companies are rising given the increase in bank lending rates, a weak rupee has
also added to the borrowing woes of corporates sourcing funds from the global
markets. The Total Investment & Insurance Solutions
"The rise in lending rates in general and borrowing cost in
specific can dampen the industrial production and the revival in the domestic
demand," Singh said.
Meanwhile, hedging costs
have increased and dollar loans have become costlier.
"On top of that, we
have heightened uncertainties in the global market which has the potential to
derail the global growth story," Singh added.
On the prices front,
D&B expects the CPI inflation to be in the range of 3.7-3.9 percent and WPI
inflation to be in the range of 4.8-5 percent during August this year. The
Total Investment & Insurance Solutions
D&B expects Index of
Industrial Production (IIP) to have grown by 6.8-7.2 percent during July 2018. The
Total Investment & Insurance Solutions
The report said the
government should focus on strengthening the "macro economic stability of
India" largely owing to the rising current account deficit and stress in
the banking sector. The Total Investment & Insurance
Solutions
"The various policy
initiatives taken by the government, should help in achieving the same and
until then the need for reforms will remain the topmost priority for the
central government," Singh added.The Total Investment
& Insurance Solutions
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