In A Good Mood
Credit rating agency Moody's has had a change of mood on its view on the Indian economy. Yesterday they upgraded their credit rating outlook for India from "Negative" to "Stable"
What they're seeing
The rating agency says they're seeing an improvement in the financial sector and faster-than-expected economic recovery across sectors. And because of this, they feel downside risks to the economy are receding.
A major factor in this is that banks have not been hit by Covid as badly as earlier anticipated. After years of dealing with NPA problems, the capital situation of major domestic banks in India seems comfortable now to Moody's analysts.
They also say that the economy is on its way to recovering from the Covid devastation, and that bodes well for the government's fiscal deficit problem going ahead. (Fiscal deficit is the shortfall in government revenue vs its expenditure)
In terms of growth, Moody's is of the view that our economy will grow at around 6% in the 'medium term', with 7.9% growth this financial year. India's sovereign credit rating remains the same at Baa3