By Martin Shwenk Leade
Copyright indiatimes
On the back of robust economic growth and sound external position, Moody’s Ratings on Monday affirmed India’s long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at Baa3.”The stable outlook incorporates India’s gradually improving fiscal metrics and resilient growth prospects compared with peers. However, fiscal accommodation in the context of the uncertain global macroeconomic outlook, including revenue-eroding measures, could impede progress towards debt reduction and exacerbate already weak debt affordability,” said Moody’s in a statement. The rating agency has maintained its outlook for India as stable.”The rating affirmation and stable outlook reflect our view that India’s prevailing credit strengths, including its large, fast-growing economy, sound external position and stable domestic financing base for ongoing fiscal deficits will be sustained,” said the rating agency in its statement. “India’s credit strength are balanced by long-standing weaknesses on the fiscal side which will remain. Strong GDP growth and gradual fiscal consolidation will lead to an only very gradual decline in the government’s high debt burden, and will not be sufficient to materially improve weak debt affordability, especially as recent fiscal measures to reinforce private consumption erode the government’s revenue base,” said the agency in the statement. Live EventsNo impact of Trump tariffs and H-1b visas?The rating agency has said that the US’ imposition of high tariffs on India will have limited negative effects on India’s economic growth in the near term.”However, it may constrain potential growth over the medium to long term by hindering India’s ambitions to develop a higher value-added export manufacturing sector,” said the rating agency. Previously, the rating agency in a report had said that the 50% tariff on Indian goods announced by the US could reduce India’s economic growth by about 0.3 percentage points, bringing it down from the projected 6.3% for 2025-26. However, it added that strong domestic demand and a resilient services sector would help cushion the impact.Additionally, the agency also doesn’t expect other US policy shifts, including those related to new applications for skilled worker visas and potential levies on US businesses that outsource operations offshore, to significantly weigh on workers’ remittances or India’s services exports.Add as a Reliable and Trusted News Source Add Now!
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