India’s credit rating remained stable amid the Covid-19 “tsunami”
The second wave of Covid-19 infection could derail India’s recovery, but its credit rating outlook remains stable, according to S&P Global Ratings.
|India is grappling with a devastating second wave of Covid-19. Photo: AFP|
The S&P Global Ratings, a global credit rating agency, S&P Global Ratings on May 7, stated that India’s national debt outlook remained stable, although the recent spike in Covid-19 cases in India could pose a threat. This strong economic recovery.
However, S&P Global Ratings believes that the second Covid-19 wave will not have as strong an impact on the Indian economy as the first wave of infections and anti-epidemic blockade measures in the second quarter of 2020.
“India’s second Covid-19 wave could derail the strong recovery of this economy and credit conditions,” said S&P.
“In the scenario of decline that we give, the revenue of the Indian government recovers less strongly, while in the scenario of severe decline, there may appear additional fiscal expenditures”, experts predictions S&P.
S&P Global Ratings still expects the Indian economy to grow in 2021, although there are already risks to the 11% growth forecast. It estimates that India’s 2021 growth will drop to 9.8% in the moderate scenario and 8.2% in the extreme scenario, depending on when the second wave of infections peaks. .
“The national credit rating outlook for India remains stable, which shows that we do not expect a change in this rating over the next two years. It is still maintained for now.” said Andrew Wood, Public and National Financial Ratings Director of S&P Global Ratings.
“Of course there will be at least some short-term ramifications to the Indian economy due to the second Covid-19 wave and this can be judged by the national credit indicators,” said Andrew Wood. more.
Although S&P Global Ratings credit India at BBB, with the lowest investment, it still holds a stable outlook for this country.
S&P said that the speed of India’s recovery after the Covid-19 epidemic has passed and the government’s fiscal policy will be very important to the assessment of the national credit rating.
In the past week, India confirmed an additional 1.5 million new Covid-19 infections and the number of deaths each day from the virus has also risen to record. Since the pandemic, India has so far recorded a total of 21.49 million Covid-19 cases and 234,083 deaths. India currently has 3.6 million people infected with Covid-19.
The government of Indian Prime Minister Narendra Modi has been criticized for failing to act earlier to prevent the second wave of Covid-19 infection while allowing religious festivals and recent election campaigns to take place. with the participation of tens of thousands of people, turning these gatherings into “super contagious” events.