Moody's Investors Service on Friday said the negative outlook on India's rating reflects increasing risks that GDP growth will remain significantly lower than in the past and partly hints at weaker policy effectiveness to address economic and institutional issues.
Moody's had, in November 2019, downgraded India's outlook to negative from stable on concerns of lower economic growth. The agency had, however, affirmed country's 'Baa2' rating.
In its update to the November forecast released on Friday, the agency said India's credit profile is supported by its large and diverse economy, and stable domestic financing base.
This is balanced against high government debt, weak social and physical infrastructure, and a fragile financial sector, which face further pressures amid the coronavirus outbreak, Moody's said in a credit opinion titled Government of India- Baa2 negative'.
The agency pointed out that the negative outlook reflects increasing risks that economic growth will remain significantly lower than in the past