Moody’s revises estimate of India’s Growth

Global rating agency Moody’s has revised its forecast of India’s growth. It has estimated a double-digit contraction to be at 11.5% during the current fiscal year.

Key Facts

• It has raised its expectations of economy’s performance in the upcoming fiscal to 10.6% from 8.7% earlier.
• Moody’s cited that the lock-down has impacted the economy severely.
• The rating agency has been cautioned of India’s ‘increasingly constrained’ credit profile by a high debt burden and a weak financial system.
• It highlighted fiscal metrics would be deteriorating further because of lower growth and weak revenue while the government’s expenditure has been rising.

Background

Earlier, On June 1 2020, Moody’s had also downgraded India’s sovereign credit rating to Baa3 from Baa2. The rating pushed the country to the lowest investment grade rating for all three major global rating agencies including S&P and Fitch.

However, the report has also cited that relatively high growth potential of large and diversified economy of India including the wide and stable domestic financial base for government debt are some of the positives for its rating profile.

About Moody’s

Moody’s or the Moody’s Corporation is an American business and financial services company. Moody’s is a holding company for Moody’s Investors Service (MIS), which happens to be an American credit rating agency.  It was founded in 1909 by John Moody. Its primary work is to produce manuals of statistics related to stocks and bond ratings. Dun & Bradstreet acquired Moddy’s in 1962.

Month: Current Affairs - September, 2020