Moody’s revises India's sovereign outlook ratings to ‘positive’

Mumbai: Global rating agency Moody’s Investor Service on Thursday revised India’s sovereign outlook ratings to ‘positive’ from ‘stable’ as it feels that the various policy measures being taken by the government would help India improve its macro-economic fundamentals.

The upward revision in its outlook suggests that there are more chances of a rating upgrade in the coming months, which will help build the confidence of foreign investors in India. India currently has ‘Baa3’ ratings from Moody’s, which is the lowest investment grade. The driver for the ratings outlook change is Moody’s view that India’s policy makers are establishing a framework that will likely allow India’s growth to continue to outperform that of its peers in the medium term and improve India’s macro-economic, infrastructure and institutional profile. Commenting on the development, chief economic advisor Arvind Subramaniam said that the upgrade validates the Modi government’s reform programmes.

“It also confirms something that we have been saying for sometime now that the growth prospects and the macro-economic prospects for the economy are improving,” he said. The rating agency noted that India has grown faster than similarly rated peers over the last decade due to favorable demographics, economic diversity, as well as high savings and investment rates.

Moody’s expects these structural advantages, will keep India’s growth higher than that of its peers.