Owing to the factors like coronavirus outbreak, weak policy implementation and high debt levels, credit rating agency, Moody's Investors Service in its latest report has said that an upgrade of its India's rating at Baa2 negative is unlikely in the near term. It also added that the negative outlook reflects increasing risks that economic growth will remain significantly lower than in the past.
However, the rating agency noted that India's credit profile is supported by its large and diverse economy and stable domestic financing base. It also said that this is balanced against high government debt, weak social and physical infrastructure, and a fragile financial sector which face further pressures amid the coronavirus outbreak.
Further, Moody's is expecting India's FY21 GDP growth at zero per cent and FY22 growth at 6.6 per cent. According to the rating agency, the rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices and financial market turmoil are creating a severe and extensive economic and financial shock.