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Moody’s changes India’s outlook to positive: Update

Moody’s changes India’s outlook to positive: Update

Moody’s changes India’s outlook to positive: Update

Mumbai: This is a great news for the government. Now it has no need to panic as Moody’s Investors Service earlier today gave India much better ranking than expected.

In its latest revision of Indian economy’s outlook, Moody’s Investors Service revised India’s sovereign rating outlook to “positive”. Earlier the company had ranked India as “stable”.

Though the difference isn’t much at the moment, it gives a clue that Moody’s Investors Service is actually thinking of future upgrade in India’s sovereign rating. It also went on to add that the exact impact of government’s actions will become apparent in 12-18 months and this will decide the action on India’s sovereign rating.economy

Every nation wants better sovereign ratings as higher rating actually boosts the credibility of that nation’s economy. In India’s case too, a higher rating would build the confidence of foreign investors to invest in the economy. India’s economy is officially pegged to grow by 7.4% in the just concluded financial year from 6.9% in 2013-14. The government is expecting the economy to grow in the range of 8.1-8.5% for 2015-16.

In a press release Moody’s Investors Service said, “Many of these measures are at relatively early stages of design and have yet to be implemented… the ability of policymakers to strengthen India’s sovereign credit profile to a level consistent with a higher rating will become apparent over the next 12-18 months”.

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