Rating agency Moody’s maintained outlook for the government of India to be stable. The long-term and short-term ratings of the government of India is pegged at Baa3 and P-3, respectively.
The stable outlook incorporates the likelihood that India’s fiscal metrics will continue to gradually improve amid robust growth prospects compared with peers.
Maintaining a stable outlook, Moody’s noted India balances its large and diversified economy with high growth potential, a relatively sound external position, and a stable domestic financing base for government debt against high general government debt, weak debt affordability and low per capita income.
A stronger and more stable economy has emerged from the pandemic, said Moody’s although it does not expect a material reduction in debt amid gradual fiscal consolidation over the next year.
It also asserted that India benefited from infrastructure development, digitalization and the rehabilitation of the financial system.
Following a series of relatively strong growth numbers in the first three quarters of financial year 2023-24, Moody’s has revised India’s real GDP growth projection to 8 per cent for the full year.
Moody’s projects economic growth to be sustained at well above 6 per cent over the next two fiscal years, although there are upside risks to the projections.
Moody’s Ratings has completed a periodic review of the ratings of India and other ratings that are associated. The review was conducted through a rating committee held on April 4, 2024.
In a report released by Moody’s in March, the global rating agency said it expected India’s economic growth in 2024-25 growth above that of other emerging market G20 peers, given its domestic demand managed to sustain momentum.
India’s GDP grew at a massive 8.4% during the October-December quarter of the current financial year 2023-24 and the country continued to remain the fastest-growing major economy. The Indian economy grew 7.8% and 7.6% during the preceding two quarters – April-June and July- September.
India’s economy grew 7.2% in 2022-23 and 8.7% in 2021-22, respectively.
