Page 106 - ES 2020-21_Volume-1-2 [28-01-21]

Does India’s Sovereign Credit Rating reflect its fundamentals No! 89

Figure 3: India’s Sovereign Credit Rating by CRAs (1998-2020) and Rationale

(A) S&P

BBB 4
Strong economic prospects and external
balance sheet, and deep capital market, which
supports an improving fiscal position.
BBB- 3 Fading prospects for meaningful fiscal
adjustment, weakening the sustainability
Sovereign Credit Rating BB+ 2 1 Improved external position
of recent economic growth rates and
potentially further raising high external
debt burden.
and growth prospects
BB

BB -
0
Apr-98 Dec-98 Aug-99 Apr-00 Dec-00 Aug-01 Apr-02 Dec-02 Aug-03 Apr-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-08 Dec-08 Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 Aug-17 Apr-18 Dec-18 Aug-19 Apr-20 Dec-20

(B) Moody’s

Baa2 4
Weakening macroeconomic balances, Economic and institutional reforms, greater
fractious political environment, confidence that public debt will remain stable,
imposition of international sanctions after support to public sector banks which mitigates
nuclear explosions banking sector risks
and supports growth
Baa3 3 Reduction in external vulnerability, Risks of low growth,
Sovereign Credit Rating Ba1 2 1 Substantial improvement in external fiscal postion and financial
resilient economic performance and
deterioration in general govt.
rising foreign investment
sector stress
liquidity position, current account
surplus, increased capital inflows
Ba2
Ba3 0
Apr-98 Dec-98 Aug-99 Apr-00 Dec-00 Aug-01 Apr-02 Dec-02 Aug-03 Apr-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-08 Dec-08 Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 Aug-17 Apr-18 Dec-18 Aug-19 Apr-20 Dec-20

(C) Fitch

BBB 4

BBB- 3 High fiscal Fiscal consolidation taking hold,
Sovereign Credit Rating BB+ 2 1 slowdown c Strengthening Balance of Payments position,
deficit and
reinforced by impressive growth and
economic
strong external balance sheet

rapidly improving external balance sheet and
poor fiscal performance
BB

BB - 0
Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20

Source: S&P Global, Moody’s and Fitch