Moody's cuts India's credit outlook to negative; govt not convinced

Outlook downgrade comes 2 yrs after ratings upgrade. Govt says fundamentals remain strong

On the day marking the third anniversary of demonetisation, global ratings agency Moody’s cut its outlook for India’s credit ratings to “negative” from “stable”, citing the ongoing economic slowdown, financial stress among rural households, weak job creation, and the liquidity crunch in non-banking financial companies.

Moody’s has affirmed India’s Baa2 long-term sovereign rating, the second-lowest investment grade score, but said the negative outlook indicated that an upgrade was unlikely in the near term. 

Just two years ago, in November 2017, it had upgraded India’s ratings a notch to Baa2 from Baa3.

“Moody’s decision to change the outlook to negative reflects