The country’s financial system is getting stronger, Moody’s said – expected further jump in revenue
New Delhi. Credit rating agency and research firm Moody’s Investors Service on Tuesday said that the trend of gradual fiscal consolidation for India continues and is expected to do better in the coming years in terms of debt stabilization with revenues. . Moody’s Investors Service Senior Vice President Christian de Guzman said India’s ‘Baa3’ credit rating balances relatively high economic growth and high debt positions in emerging markets. The situation of reduction in the debt of Indian companies shows the strong financial system of the country.
“We expect India to be the fastest growing economy in the G-20 next year… However, high inflation is a risk to the country’s growth because Inflation will reduce the purchasing power of households and companies.
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The rating agency reduced the economic growth forecast from 7.7% to 7.0%
Earlier this month, Moody’s cut India’s economic growth forecast for 2022 to 7.0 per cent from 7.7 per cent earlier. Along with this, in 2023 it has been estimated to decrease to 4.8 and in 2024 to increase to about 6.4 percent. India’s economic growth rate in 2021 was 8.5 percent. The rating agency has projected the growth rate of G-20 economies to decline to 1.3 percent in 2023. This is much less than the earlier estimate of 2.1 percent.
Guzmán said that further improvement in the fiscal situation and fiscal consolidation, contrary to expectation, would lead to a significant reduction in debt. This will make the situation positive for India in terms of ratings. It is noteworthy that Moody’s had in October last year upgraded India’s credit outlook from ‘negative’ to ‘stable’ and retained the Baa3 credit rating. This is a low investment grade rating and just one notch above junk status.
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Guzman said that the performance at the revenue level is relatively strong. We believe that the position of fiscal strength will continue. Along with this, the situation will be stable in the case of loans as well and there is no possibility of another bounce in it. The country’s debt-to-GDP ratio is estimated to be 84 per cent at the end of 2022, which is higher than many emerging economies.
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Tags: economics, GDP, GDP growth, India’s GDP
FIRST PUBLISHED : November 22, 2022, 20:08 IST