• Linkdin
Maximize your media exposure with Fibre2Fashion's single PR package  |   Know More

Indian fiscal conditions to constrain credit strength: Moody's Ratings

17 Jan '25
2 min read
Indian fiscal conditions to constrain credit strength: Moody's Ratings
Pic: Adobe Stock

Insights

  • India's fiscal conditions will continue to constrain its credit strength in 2025, though US-China tension could benefit the economy, Moody's Ratings has said.
  • It expects only gradual fiscal consolidation, and debt to remain significantly higher than the Baa-rated peer median of around 57 per cent.
  • Despite recent revenue gains, it also expects debt affordability to be much weaker than rated peers.
Fiscal conditions in India will continue to constrain its credit strength this year, though US-China tension could benefit the country’s  economy, Moody's Ratings recently said.

Growth and inflation are levelling out, with strong domestic demand bolstered by modest easing in global and regional financial conditions, the rating agency said in its report on Asia-Pacific (APAC) sovereigns.

But proposed trade restrictions by the US would weaken economic output across the region, it noted.

"We expect only gradual fiscal consolidation, and debt to remain significantly higher than the Baa-rated peer median of around 57 per cent," Moody's said.

"Despite gains in revenue in recent years [in India], we also expect debt affordability to remain much weaker than rated peers," it added.

Geopolitical risks will persist this year in the APAC region, flowing from tensions in the US-China relationship and around regional hotspots, it observed.

Moody's sees a low likelihood of a military conflict in the Taiwan Strait or the Korean Peninsula, but tensions will remain elevated, driven primarily by US-China ties.

"These tensions are shaping trade and investment flows, which may be further diverted away from China as the US tightens investment in strategic sectors, further weakening China's economy and dampening regional growth. However, this shift could benefit India and Southeast Asian economies," Moody's added.

Fibre2Fashion News Desk (DS)

Leave your Comments

Esteemed Clients

Woolmark Services India Pvt. Ltd.
Weitmann & Konrad GmbH & Co. KG
VNU Exhibitions Asia
USTER
UBM China (Shanghai)
Tuyap Tum Fuarcilik Yapim A.S.
TÜYAP IHTISAS FUARLARI A.S.
Tradewind International Servicing
Thermore (Far East) Ltd.
The LYCRA Company Singapore  Pte. Ltd
Thai Trade Center
Thai Acrylic Fibre Company Limited
X
Advanced Search