Moody’s retains India’s Baa3 rating with stable outlook
Moody’s Investors Service recently announced its decision to maintain India’s sovereign credit rating at a minimum investment grade of ‘Baa3’ and continue with its “stable” outlook on the country.
- According to Moody’s, India’s economic growth rate in the current financial year will be 7.6 percent as compared to 8.7 percent in the previous financial year 2021-22. At the same time, the growth rate of GDP (Gross Domestic Product) is estimated to be 6.3 percent in 2023-24.
- According to Moody’s, right now India’s biggest challenges include things like low per capita income, rising government debt, low debt capacity and limited government effectiveness.
- Also, rising challenges to the global economy, including the Russo-Ukraine war, high inflation and a hike in policy rates by central banks, will adversely affect the ongoing recovery in India in the financial years 2022-23 and 2023-24.
- Moody’s said that if India’s economic growth is faster than expected, then it may increase the rating further. This can happen only after implementing economic and financial sector reforms.
- The rating agency expects the quality of the Indian banking system to improve further as the economy emerges out of the pandemic. As this improves, conditions will be favorable for banks and this will strengthen business confidence.
About Moody’s Investors Service
Moody’s Investors Service, often referred to simply as Moody’s, is the bond credit rating business of Moody’s Corporation. This organization provides financial research globally on bonds issued by government and commercial organizations. Moody’s, along with Fitch Group and Standard & Poor’s, are considered the big three credit rating agencies. Its headquarter is in New York.
Category: Economy & Banking Current Affairs - 2022
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