Moody’s has upgraded India’s rating outlook from negative to stable. The decision to change the outlook to stable reflects Moody’s view that the downside risks from negative feedback between the real economy and financial system are receding, the rating agency said. It is a thumbs up for the Modi government’s reforms.
Moody’s said an economic recovery is underway with activity picking up and broadening across sectors.
According to Moody’s, if the reforms announced by the Modi Government are implemented effectively, these policy actions would be credit positive and could lead to higher potential growth than expected. Moody’s said looking ahead, it expects India’s real GDP growth to average around 6% over the medium term.