Moody’s to cut India rating if debt sustainability worsens
July 11th, 2009
Moody’s said India’s budget is in-line with the stable sovereign outlook, reports CNBC-TV18 quoting agencies. India’s economic growth continues to be strong and will continue to gain from fiscal steps, it said. The rating cut is likely if India’s debt sustainability worsens. India’s fiscal gap is consistent with its near-term debt stability.
There were fears that India’s rising fiscal deficit may trigger downgrades by various rating institutions.
On July 8, S& today warned India that a high fiscal deficit of 6.8% is unsustainable in the medium-term. The agency did not downgrade India and said this deficit has not come as a surprise.