Moody’s upgrades India’s sovereign issuer ratings on high growth potential
In its latest review on the Indian economy, the US-based ratings agency, Moody’s Investors Service, raised the Government of India’s local and foreign currency debt ratings to Baa2 from Baa3, citing the country’s high growth potential on the back of continued progress on economic and institutional reforms.
Moody’s also changed its rating outlook to Stable from Positive, saying that at the Baa2 level the risks to India’s credit profile were broadly balanced.
The ratings agency said in a statement: “In the meantime, while India’s high debt burden remains a constraint on the country’s credit profile, Moody’s believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios”.
According to the Research Analysts at Nomura, Moody’s has upgraded its local and foreign currency issuer ratings for India to Baa2 from Baa3, with a Stable outlook, from Positive. This puts Moody’s ratings one notch above the other major ratings agencies, S&P (BBB- Stable) and Fitch (BBB- Stable).”
“In our view, Moody’s upgrade confirms the positive direction of government reforms and their expected benefits over the medium term. These include implementation of the GST, bankruptcy reforms, infrastructure spending, and the large-bank recapitalization, among others. These have been recognized by the World Bank as well, with a 30-place improvement in India’s “Ease of doing business” ranking from 130 to 100,” Nomura Research Team added.