Moody’s Investors Service has downgraded India’s sovereign rating by one notch citing concerns about a prolonged period of slow growth. While the Covid-19 pandemic has worsened economic conditions in India, it is not the sole cause for the downgrade, Moody’s said in its release, adding that the outlook on India’s rating remains negative.
Moody’s Investors Service had the highest rating on India, having upgraded it in 2017. Fitch Ratings and Standard and Poor’s rate India one notch below Moody’s.
Following the review, Moody’s rating on India stands revised to Baa3 from Baa2, with a negative outlook. It still remains investment grade.
"The decision to downgrade India’s ratings reflects Moody’s view that the country’s policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector", as said by moody's investor team.
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