Moody has warned that rising current account deficit and external debt may impact India's credit risk profile because they increase the country's vulnerability to international financial volatility
The new report from Moody's, which has assigned Baa 3 with a stable outlook to India, contradicts recent softening of stance by other global ratings agencies like Fitch and Standard & Poor, which currently have negative outlook on India's sovereign ratings.
In a note issued on Friday, Moody's Investors Service said that India's current account deficit at record high of 5.4% of the gross domestic product in the second quarter ended September and 4.6% in the first half of the current fiscal is partly a result of its domestic policies like fuel subsidies, rise in gold imports despite increase in international gold prices, and loose fiscal policy.
The current-account deficit, which averaged less than 1% of GDP in the first half of the last decade, was 4.2% of GDP last fiscal year. so according to Moody s view Indian economy would have a chance to be in the phase deterioration in the current account deficit as well external debt .
The new report from Moody's, which has assigned Baa 3 with a stable outlook to India, contradicts recent softening of stance by other global ratings agencies like Fitch and Standard & Poor, which currently have negative outlook on India's sovereign ratings.
In a note issued on Friday, Moody's Investors Service said that India's current account deficit at record high of 5.4% of the gross domestic product in the second quarter ended September and 4.6% in the first half of the current fiscal is partly a result of its domestic policies like fuel subsidies, rise in gold imports despite increase in international gold prices, and loose fiscal policy.
The current-account deficit, which averaged less than 1% of GDP in the first half of the last decade, was 4.2% of GDP last fiscal year. so according to Moody s view Indian economy would have a chance to be in the phase deterioration in the current account deficit as well external debt .
.JPG)
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