Moody's affirms India's ‘Baa3’ stable rating, projects over 6% growth for next two years

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ANI reported. In its latest assessment, Moody's noted that India's stable outlook reflects the likelihood of gradual improvement in the country's fiscal metrics, supported by its robust growth prospects, compared to its peers, as per the report.

According to Moody's,India's credit profile balances its large and diversified economy, high growth potential, relatively sound external position, and stable domestic financing base for government debt, against the challenges of high general government debt, weak debt affordability, and low per capita income. The rating agency highlighted that India has emerged from the pandemic with a stronger and more stable economy, despite not expecting a material reduction in debt levels in the near term, amid gradual fiscal consolidation.

Moody's also pointed to India's progress in areas such as infrastructure development, digitalization, and the rehabilitation of the financial system as contributing factors to the country's economic resilience. Following a series of relatively strong growth numbers in the first three quarters of the financial year 2023-24, Moody's revised India's real GDP growth projection to 8% for the full year.

The agency expects economic growth to be sustained at well above 6% over the next two fiscal years, with upside risks to the projections. The rating review was conducted by Moody's on April 4, 2024.

In a previous report released in March, the agency had stated that it expected India's economic growth in 2024-25 to surpass that of other emerging market G20 peers, driven by the country's robust domestic demand. India's GDP growth has remained resilient, expanding by 8.4% during the October-December quarter of the current financial year, cementing the country's