Why Moody's downgrade is not a bolt from the blue but still not justified

While this downgrade will not affect the sovereign as it does not borrow overseas, it will however affect Indian companies borrowing from abroad

The lowering of India’s credit ratings by Moody’s from Baa2 to Baa3 with a negative outlook does not come as a shock considering that downgrading of all countries due to the pandemic was quite likely given the way things have turned out. However, it was logical to assume that no such judgment call would be taken at this point of time. Let’s see the basis for the same.

The first point made is about lower GDP growth in the present conditions. This holds for probably all economies and though the IMF spoke of positive growth and the UN called India