Moody’s affirms stable outlook for India, says economy has high growth potential: Moody’s affirmed a stable outlook on India, saying its credit profile reflects key strengths with high growth potential. The sovereign credit outlook was changed from negative to stable by Moody’s Rating Agency. Baa3 rating has been assigned to the Government of India by the agency.
Moody’s affirms stable outlook for India, says economy has high growth potential
Moody reaffirmed a stable outlook for India and noted that the country’s credit profile reflected important characteristics such as its sizable, diversified economy with high growth potential, relatively strong external position, and a steady domestic financing base for government debt. The challenges faced are high general government debt and Low Debt Affordability.
According to Moody, the Indian economy expanded by 7.6 percent in the current fiscal year, compared to 8.7 percent growth in the previous fiscal year that ended on March 31. It forecasts 6.3 percent GDP growth for 2023-24.
While the global economy continues to be afflicted by severe problems brought on by the largest economies, whether it be the frontloading of Federal Reserve rate hikes or China’s worsening construction bubble, foreign banks and rating agencies like Moody affirms a stable outlook for India and say Indian economy has high growth potential. According to experts, India is set to become the world’s factory and it is going to be India’s century and not just a decade.
The Indian economy has higher capital buffers and greater liquidity, and as a result, the risk of negative feedback between the economy and the financial system is diminishing, according to the agency. The agency has assigned the Government of India a Baa3 rating with a stable outlook.
- It is a company that assigns ratings on borrowers’ creditworthiness. The ratings, which take into account the anticipated loss to investors in the case of failure, are based on a standardized grading system.
- Credit ratings, risk analysis, and research for companies, bonds, and governmental bodies are offered to investors by Moody’s Investors Service.
Credit rating agency
- Credit rating agency is in charge of determining credit ratings, which assess a debtor’s capacity to repay a loan by making timely principal and interest payments as well as the possibility of default.
- The top three international credit rating companies, Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s (S&P), collectively dominate around 95% of the rating market worldwide.
- The Securities and Exchange Board of India (SEBI) has registered seven credit rating companies in India: CRISIL, ICRA, CARE, India Ratings and Research Private Limited, Acuite Ratings & Research, Infomerics Valuation and Rating Private Limited and Brickwork Ratings India Private.