Oct 03, 2024 10:32 PM IST
CareEdge Global IFSC Ltd assigned a long-term foreign currency (LTFC) rating of BBB+ (investment grade) to India
GANDHINAGAR: Credit rating agency CareEdge on Thursday launched a report on sovereign ratings of global economies for 39 countries, the first agency in the country to enter the global ratings space through its subsidiary, CareEdge Global IFSC Ltd, the company said in a statement.
CareEdge Global IFSC Ltd, which operates from the GIFT City in Gandhinagar, assigned a long-term foreign currency (LTFC) rating of BBB+ (investment grade) to India, based on the resilient post-pandemic rebound of the Indian economy and increased focus on infrastructure investment, the statement said.
The outlook also factors the projected lowering in the general government debt, albeit gradually, aided by healthy nominal GDP growth and continued focus on fiscal consolidation, company officials said at an event.
“Going ahead, we project the general government debt to remain on a downward trajectory in the medium-term moderating to 78% of GDP by FY30 and further to 73.5% by FY35,” the report said. The company believes that elevated general government debt and weak debt affordability remain the key credit constraints but India’s credit assessment gains from its large and diverse economic structure as well as its healthy growth performance.
Rajani Sinha, chief economist at CareEdge Ratings, said India’s strong reform momentum in recent years. Key government initiatives such as Digital India, the Production Linked Incentive scheme, and PM Gati Shakti have improved the economy’s competitiveness and foreign trade while increasing infrastructure investments, according to Sinha. She highlighted India’s demographic dividend as a crucial factor in unlocking the country’s long-term growth potential.
In its inaugural sovereign rating action, CareEdge Global also assigned AAA rating to Germany, the Netherlands, Singapore and Sweden; AA+ to Australia, Canada and the US; AA- to France, Japan, Korea, the UAE and the UK; A+ to Portugal, A to China and Spain, A- to Chile, Malaysia, among others.
Revati Kasture, executive director of CareEdge Ratings, said the agency’s methodology ensures equal treatment of both developed and emerging economies by applying consistent thresholds across all countries. “Our approach aims to provide investors with a diverse range of perspectives on different countries and markets,” she added.
Sanjeev Sanyal, member of the PM Economic Advisory Council, said India’s potential to build a world-class services sector to rival China’s manufacturing. He emphasised India’s strong financial systems, such as the GIFT City and the Reserve Bank of India, and urged the country to leverage its institutional framework to compete globally.
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