Mumbai: India’s economy may grow by more than a forecast of 5.5% in fiscal 2009-10 as the return of a strong Congress-led coalition will provide stability and boost chances of further reforms, Macquarie Research said.
“The decimation of the Left will eliminate a major irritant to the much needed and long overdue economic reforms,” economist Rajeev Malik wrote in a note.
Macquarie said the second-half of the current year is likely to do better than the first half, which might lead it to hike its forecast.
In the budget, it said a “fiscal blow-out -- as feared by some investors owing to coalition politics -- is unlikely,” and the new government will focus on fiscal responsibility.
It sees foreign investment liberalisation and disinvestment as among the biggest beneficiaries of the results. Key areas in focus will be insurance, retail and banking, it added.
Macquarie maintains its June 2010 Sensex target of 15,000.