India’s devastating COVID-19 disaster is making traders query greater than ever whether or not after years of debt accumulation and patchy progress on reforms, a rustic touted as a future financial superpower nonetheless deserves its ‘funding grade’ standing.
A spate of downgrades final yr had already left India’s funding grade credit score scores hanging by a thread and the severity of the present virus wave is making the principle businesses, S&P, Moody’s and Fitch agitated once more.
All three companies have both minimize – or warned they might minimize – the nation’s development forecasts in current weeks and that authorities debt as a share of GDP will leap to a file 90% this yr.
In that respect although, the world’s second most populous nation has lengthy been an anomaly.
The median debt stage for international locations Fitch has within the BBB bracket – India is BBB- – and on a downgrade warning with each Fitch and Moody’s – is at present round 55% and solely 70% even for these languishing on the lowest depths of ‘junk’ grade.
With COVID-19 pushing up debt virtually in