InvestorQ : Why has Moody’s raised India’s sovereign credit rating?
indhumathi Sayani made post

Why has Moody’s raised India’s sovereign credit rating?

2 months ago

Let me clarify that Moody’s has not upgraded the rating of India, which remains at Baa3. However, Moody’s has raised India’s sovereign rating outlook from “Negative” to “Stable”. This is considered to be the outlook for the future and is like a buffer for the rating. The current rating has been kept static at Baa3, which is about one notch above the Speculative Grade. The rating upgrade was demanded by India, but was no on Moody’s agenda.

This change in outlook from Negative to Stable was an outcome of a faster than expected recovery in GDP growth in Indian economy. In addition, the current account deficit had moved into surplus in FY21 and also in the June-21 quarter. The checks and balances on fiscal deficit were also working fine. However, Moody’s has highlighted some risks to the rating like possible COVID resurgence, high debt levels and low per capita income.