Last Updated: September 06, 2022, 14:14 IST
Moody’s says risks stemming from a high debt burden and weak debt affordability remain.
Moody’s says the stable outlook reflects its view that the risks from negative feedback between the economy and financial system are receding
Moody’s Investor Service on Tuesday said it has retained its sovereign rating on India at ‘Baa3’ with a stable outlook. It also added that the impact of the Russia-Ukraine war, higher inflation and tightening global financial conditions are unlikely to derail India’s economic recovery from the pandemic.
“The stable outlook reflects our view that the risks from negative feedback between the economy and financial system are receding. With higher capital buffers and greater liquidity, banks and nonbank financial institutions (NBFIs) pose much less risk to the sovereign than we previously anticipated, facilitating the ongoing recovery from the pandemic,” Moody’s in a statement said.
It added that while risks stemming from a high debt burden and weak debt affordability remain, Moody’s expects that the economic environment will allow for a gradual narrowing in the general government fiscal deficit over the next few years, avoiding further deterioration in the sovereign credit profile.
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