Moody’s retains India’s sovereign credit rating at Baa3 with stable outlook

The impact of the Russia-Ukraine conflict, higher inflation and tightening global financial conditions on the back of policy tightening, is unlikely to derail India’s ongoing recovery from the pandemic in 2022 and 2023, Moody’s said in a release on Tuesday.

As per the release, India’s sovereign ratings has been retained by Moody’s at Baa3 with a stable outlook.

“The stable outlook reflects our view that the risks from negative feedback between the economy and financial system are receding.

“With higher capital buffers and greater liquidity, banks and nonbank financial institutions (NBFIs) pose much less risk to the sovereign than we previously anticipated, facilitating the ongoing recovery from the pandemic. While risks stemming from a high debt burden and weak debt affordability remain, we expect that the economic environment will allow for a gradual narrowing in the general government fiscal deficit over the next few years, avoiding further deterioration in the sovereign credit profile,” the release said.

The release also said that the ratings agency could upgrade the rating if India’s economic growth potential increased materially beyond their expectations, supported by the effective implementation of economic and financial sector reforms that led to a significant and sustained pickup in the private sector investment.

“Effective implementation of fiscal policy measures that resulted in a sustained decline in the government’s debt burden and improvements in debt affordability would also support the credit profile,” release added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor