Global ratings agency Moody's Investors Service has revised 2015 outlook for Indian non-financial corporates to ‘stable’ from ‘negative’, driven by economic recovery and political stability. The outlook reflects Moody's expectation for fundamental business conditions in the sector over the next 12 to 18 months.
The revised outlook reflects the global rating agency’s review on economic recovery, enhanced access to the global markets and successful implementation of pro-market policies that would lead to improved corporate cash flows and be broadly supportive of business growth.
According to the agency, improved external vulnerability should also reduce foreign exchange risk for Indian corporates, despite gradual interest rate normalization by the US Federal Reserve.
Further, Moody’s expects India’s growth to be at 5.6% for the fiscal year ended March, 2015, led by acceleration in manufacturing activity. This development comes on the heels of the Paris-based think-tank pegging India’s growth rate, which languished below 5% for the last two fiscals due to high interest rates, stubborn inflation and weak investment, to grow by 6.6% in 2015-16, up from its last forecast of 5.7% growth in May and to edge higher to 6.8% in 2016-17.