Finance Ministry Officials Meet with Moody’s to Discuss Sovereign Rating and Economic Indicators

Officials from India’s Finance Ministry held a meeting with representatives from Moody’s Investors Service Inc. to discuss the state of the country’s economy and present a case for a better sovereign rating. The meeting, which occurs annually as part of a series of interactions, aimed to explain the government’s assessment of the economy and assist credit agencies in making their assessments. It was reported that the meeting was conducted in a cordial atmosphere.

Discussion on Disinvestment Roadmap

During the meeting, Moody’s representatives and Finance Ministry officials discussed the government’s disinvestment roadmap. The officials emphasized that disinvestment should be viewed as a reform exercise rather than solely a revenue generation effort. The focus was on highlighting the positive impact of reforms on the economy.

Sovereign Rating and Fiscal Deficit

Moody’s currently assigns India a sovereign rating of Baa3 with a stable outlook. In the fiscal year 2022-2023, India’s fiscal deficit was reported at 6.4% of GDP, and for the current year, it is budgeted to be at 5.9% of GDP. The Finance Ministry officials aimed to showcase various positive economic indicators to support their case for a better sovereign rating.

Indian Economy Growth and Recovery

Official estimates suggest that the Indian economy is projected to grow at a rate of 6.5% in the current fiscal year. Policymakers are optimistic that the impact of the pandemic and lockdown restrictions on household spending has diminished. They believe that private consumption has now regained momentum and is aligned with the growth trend seen before the pandemic.

Cordial Atmosphere and Communication

The meeting between Finance Ministry officials and Moody’s representatives was reported to have taken place in a cordial atmosphere. The purpose of the meeting was primarily to convey the government’s assessment of the economy to Moody’s and aid the credit agency in their evaluations. It is important to note that this meeting does not serve as a platform for questioning the rating methodology or making cross-country comparisons.

Unanswered Inquiries

Despite the meeting taking place, emails sent to both Moody’s Investors Service and the Finance Ministry on the same day remained unanswered. The exact reasons for the lack of response are unknown.

Conclusion

Finance Ministry officials engaged in a meeting with Moody’s to discuss the state of India’s economy and present a case for a better sovereign rating. The meeting provided an opportunity for the officials to explain their assessment of the economy and highlight positive economic indicators. Key topics discussed included the disinvestment roadmap and the need to view disinvestment as a reform exercise. The meeting was conducted in a cordial atmosphere and aimed to assist credit agencies in their assessments. The growth trajectory of the Indian economy and the recovery of private consumption were also emphasized. However, inquiries made via email to Moody’s and the Finance Ministry remained unanswered.