Moody's sees India's sovereign outlook stable

Global rating agency Moody's on Friday said India's sovereign outlook is stable and does not warrant any action on the country's credit rating in the next 12-18 months.

"We feel the outlook (on India) is stable. We do not see ratings movement up or down in the next 12-18 months," Moody's Sovereign Ratings VP and lead analyst (India) Atsi Sheth said on the sidelines of ADB annual meet.

Sheth said Moody's has already incorporated the possibility of an improvement in India's growth in its current rating outlook.

In January, Moody's had reaffirmed sovereign credit rating of India at 'Baa3', which indicates investment grade, with a stable outlook. It had, however, cautioned that a high fiscal deficit could pull down the growth in the coming years.

"We expect the downturn will be extended if that is what the world is going through right now. But we do expect that as conditions globally improve, if the domestic situation improves, growth too will see an upward trajectory," Sheth said.

Moody's

representatives are slated to meet the Finance Ministry officials next week, where the ministry would be pitching for a ratings upgrade.

Moody’s expects Indian economy to grow by 6 per cent in 2013-14. In 2012-13, the economic growth is estimated to have slowed to a decade low of 5 per cent.

Finance Minister P Chidambaram has pegged fiscal deficit for this fiscal at 4.8 per cent, lower than 5.2 per cent in the last financial year.

There are concerns on Current Account Deficit (CAD), which has touched a record high of 6.7 per cent in the December quarter of 2012-13. For the entire fiscal, CAD is likely to be around 5 per cent.

Despite global uncertainty, the Finance Minister expects the economic growth to be over 6 per cent in the current fiscal.

To boost growth, the government has taken several measures in the recent past, including liberalising FDI norms in various sectors like multi-brand retail and aviation.

Besides, it has also set up Cabinet Committee on Investment to accord fast-track clearances to large projects. The CCI has cleared projects worth over $27 billion in the past four months.