Moody's gauges positive outlook of Modi govt.
Credit rating outlook raised, Fitch projects faster growth
I NTERNATIONAL rating agency Moody's raised India's credit rating outlook to ' positive' on Thursday and said that an upgrade in the country's sovereign rating is also possible in the next 12- 18 months giving a much- needed boost to the global image of the Narendra Modi government.
Another rating agency Fitch raised its forecast for GDP growth this fiscal to eight per cent.
India's sovereign rating stands at ' Baa3', the lowest investment grade-- just a notch Moody's
of Modi above ' junk' status. The sovereign rating and outlook are key parameters that foreign investors and financial institutions take into account for gauging a country's investment climate.
Upgrading the outlook from ' stable' to ' positive', Moody's said that India has grown faster than many other peers over the last decade and the actions of the policymakers should further boost the country's economic and financial strength in coming years.
Moody's sovereign rating analyst Atsi Sheth told news agency PTI,
" Our positive rating outlook for India reflects our view that the probability has now increased that over the next 12- 18 months India's sovereign credit fundamentals will improve to levels consistent with a rating higher than its current Baa3 rating." Moody's also said that the Indian economy is still heavily exposed to external and financial shocks because of which it has maintained ' Baa3' rating for the country. Union finance minister Arun Jaitley said that the action is significant, but the government
has to do more to further boost economy. Reserve Bank of India governor ( RBI) Raghuram Rajan said, " It is a positive perception of what we have done over the past few quarters," but cautioned that the government and regulators should not lose sight on what more needs to be done.
Chief economic adviser Arvind Subramanian said that the upgrade proves that the government is moving in the right direction. " It validates India's commitment on fiscal discipline," he added.
Fitch, which maintained its equivalent ' BBB-' rating with stable outlook, on the other hand projected eight per cent GDP growth for this fiscal, higher than 7.8 per cent estimate of the RBI. It also indicated positive rating action if the government follows its fiscal consolidation road map.
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|Publication:||Mail Today (New Delhi, India)|
|Date:||Apr 10, 2015|
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