IGI Logo

Credit rating agency -- Moody's Investors Service in its latest report has said that the credit worthiness outlook for sovereigns in the Asia-Pacific (APAC) region, including India for 2023 is stable as compared to the negative outlook for sovereigns globally. It stated the debt sustainability and financial stability are relatively well anchored in the region, with contained government liquidity risks, broadly stable debt dynamics and generally sound external positions.

According to it, the gross domestic product (GDP) growth will stabilise close to potential levels and outperform other regions, despite higher global inflation and tighter financial conditions. Most sovereigns have begun fiscal consolidation, but social pressures are slowing progress.

As regards India, which is in post-pandemic recovery mode, Moody's expects output gaps to continue. The debt affordability has been anchored in India, Malaysia and Thailand as they have a large institutional investor base and banking systems. It mentioned elevated commodities prices will keep spending on food and fuel subsidies or other measures high, with little impetus to reduce support, particularly for economies with elections approaching in 2023 or early 2024, including Bangladesh and India.