Moody's maintains 'stable outlook' for India, gives this estimate about growth rate

Rating agency Moody's has maintained a stable outlook for the Government of India. The long-term and short-term ratings of the Government of India are pegged at Baa3 and P-3 respectively by the agency. The stable outlook incorporates the possibility that India's fiscal metrics will continue to show strong growth, albeit gradually, compared to close peers.

Maintaining a stable outlook, Moody said India balances its large and diversified economy through high growth potential, relatively strong external position, and high general government debt. Moody's said a stronger and more stable economy has emerged since the pandemic. However, a material reduction in debt is not expected amid gradual fiscal consolidation at the beginning financial year.

Moody's also said that India has benefited from infrastructure development, digitalization and strengthening of the financial system. Following a series of relatively strong GDP data in the first three quarters of the fiscal year 2023-24, Moody's has revised India's real GDP growth forecast for the full year to 8 per cent.