Moody’s cuts India’s outlook to negative – Newspaper

MUMBAI: Sellers wait for customers in a wholesale market at a fishing port on Friday. Reuters

BENGALURU: Moody's Investors Service reduced the outlook for India's ratings to "negative" as "stable," citing the growing risks of Asia's third largest economy growing at a slower pace than in the past, sending to the markets Securities almost 1 percent lower at Friday's close.

However, Moody & # 39; s maintained the local and foreign currency ratings of the country at "Baa2".

The cut in prospects partly reflected the inefficiency of the government and policies to address economic weakness, which has led to an increase in the debt burden, Moody & # 39; s said.

The rating agency also reduced its outlook for 21 Indian companies, including State Bank of India, Indian Oil Corporation Ltd, Infosys Ltd and NTPC Ltd to "negative" of "stable."

India's economy grew 5{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} year-on-year between April and June, its weakest pace since 2013, which caused a lot of interest rate cuts by the central bank and forced the government to drastically reduce corporate taxes.

Moody & # 39; s now expects a government deficit of 3.7pc of GDP in the fiscal year ending March 2020, compared to a government target of 3.3pc.

"The depth and duration of India's growth slowdown, prolonged financial stress among rural households, the creation of weak jobs and, more recently, the credit crisis among non-bank financial institutions have increased the likelihood of a further slowdown entrenched, "said Moody's.

The rating agency said it does not expect the credit crisis between non-bank financial institutions to resolve quickly.

In response, the finance ministry said the fundamentals of the economy remained "fairly solid."

"India remains among the fastest growing major economies in the world, the relative position of India is not affected," the ministry said in a statement.

However, Indian dishes were reduced, with the broader Nifty 50 index closing 0.86pc. The rupee weakened to 71.25 against the dollar at 1019 GMT, compared to Thursday's close of 70,965.

Published on Dawn, November 9, 2019



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