A lower rating on US debt could cost taxpayers if it leads borrowers to demand higher interest rates on Treasury bills and notes.
Gene Fang, Associate Managing Director of Moody's Investors Service, stated in an interview with PTI that India's general government debt will be approximately 81.8% of GDP in 2022 and 23 and that the country will have low debt affordability.
It said despite the economy's strong potential, there is a risk that the pace of investment in India's manufacturing and infrastructure sectors could slow because of limited economic liberalization or slower policy implementation.
Business news updates: This is a sharp 1.1 percentage points cut from the growth projection of 8.8 per cent for current year made in May by Moody's.
In its Global Macro Outlook 2022-23 (March 2022 Update) titled: Economic Growth will suffer as fallout from Russia's invasion of Ukraine builds, the rating agency said that India's growth is likely to be 5.4 per cent in 2023.
"We expect a decline in economic activity in the April-June quarter, followed by a rebound, resulting in real, inflation-adjusted GDP growth of 9.3 per cent in the fiscal year ending March 2022 and 7. 9 per cent in fiscal 2022-23," Moody’s Investors Service said
GDP is still likely to grow in the double digits in 2021 given the low level of activity in 2020 according to Moody's Investors Service.
IndiaEs inflation trend is uncomfortably high which will restrict the Reserve Bank's ability to offer further rate cuts, Moody's Analytics said.
Billionaire Mukesh Ambani's Reliance Industries Ltd (RIL) has seen pre-tax profit recover to pre-pandemic levels on the back of continued growth in consumer businesses, Moody's Investors Service said on Monday.
Moody's Investors Service on Wednesday said Singapore's DBS Bank will strengthen its India business following merger with troubled Lakshmi Vilas Bank.
After a long clamour for fiscal stimulus, the government had on October 12 come up with measures with direct fiscal support to people and states and to generate demand.
Bank shares on Friday dropped up to 15 per cent after Moody''s Investors Service changed the outlook for Indian banking system to negative from stable.
Moody's Investors Service on Tuesday said it has downgraded Vedanta Resources Limited's (Vedanta) corporate family rating (CFR). The rating was downgraded to B1 from Ba3.
Potential payment of past due fees weighs on the credit profile of Bharti Airtel Ltd despite spectrum moratorium and price hikes, it said.
"Rated companies’ credit profiles are unlikely to improve significantly over 2020-2021 due to elevated debt levels, weakening profitability and the continued economic slowdown, which is pressuring both investment and consumption," Kaustubh Chaubal, a Moody’s Vice President and Senior Credit Officer said.
Moody's attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation.
On Friday, the Centre announced a reduction in the base corporation tax rate to 22 per cent from 30 per cent as part of stimulus measures to revive slowing economic growth.
Vedanta will need approval for waivers from its lenders prior to delisting, as it has a requirement under its bank loans to remain listed.
The agency said that the GDP forecast has been cut down due to higher oil prices and tighter financial conditions.
The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for the current fiscal to 3.5 per cent of GDP, against original targets of 3 per cent and 3.2 per cent, respectively.
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