{"id":105685,"date":"2021-05-11T18:16:23","date_gmt":"2021-05-11T12:46:23","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=105685"},"modified":"2021-05-13T11:11:41","modified_gmt":"2021-05-13T05:41:41","slug":"the-pandemic-wont-impact-indias-credit-rating-for-2-years-standard-poorsp","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-pandemic-wont-impact-indias-credit-rating-for-2-years-standard-poorsp\/","title":{"rendered":"The pandemic won&#8217;t impact India\u2019s &#8220;credit rating&#8221; for 2 years &#8211; Standard &#038; Poor(S&#038;P)"},"content":{"rendered":"\n<p><strong>What is the News?<\/strong><\/p>\n<p>Standard &amp; Poor\u2019s Global Credit Ratings has organized a webinar titled \u201cWhat A Drawn Out Second Covid Wave Means For India\u201d. During that, the S&amp;P clarified that the pandemic won&#8217;t impact the &#8216;<strong>BBB-&#8216; rating of India for 2 years.\u00a0<\/strong><\/p>\n<p><strong>What are the key outcomes of the webinar?<\/strong><\/p>\n<ul>\n<li><strong>An increase <\/strong>in coronavirus cases in India could threaten the strong economic recovery of India.<\/li>\n<li><strong>India\u2019s GDP<\/strong> would decrease to 9.8% under a moderate scenario and 8.2% under a severe scenario based on when the wave peaks. This is in comparison with the baseline forecast of 11% growth for the period.<\/li>\n<li><strong>India\u2019s sovereign rating<\/strong> will remain unchanged at the current level of BBB- for the next two years.<\/li>\n<li><strong>However, <\/strong>the pandemic will impact household consumption and retail activity due to\n<ul>\n<li>Increase in Covid-19 cases,<\/li>\n<li>Limited healthcare system capacity.<\/li>\n<li>The localized lockdowns.<\/li>\n<\/ul>\n<\/li>\n<li><strong>The second Covid-19 wave <\/strong>will not have any major impact on the government\u2019s fiscal position in a moderate downside scenario. But there could be upside pressure on the fiscal deficit as revenue generation could be weaker.<\/li>\n<\/ul>\n<p><strong>What is a Credit Rating?<\/strong><\/p>\n<ul>\n<li><strong>Firstly, a credit rating <\/strong>is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation.<\/li>\n<li><strong>Secondly, a credit rating <\/strong>can be assigned to any entity that seeks to borrow money. An entity can be an individual, a corporation, a state or provincial authority, or a sovereign government.<\/li>\n<li><strong>Thirdly, the three big Global Credit Rating Agencies are<\/strong> Fitch Ratings, Moody\u2019s Investors Service, and Standard &amp; Poor\u2019s(S&amp;P).<\/li>\n<li><strong>Fourthly, credit rating agencies in India<\/strong> came into existence in the late 1980s. Some credit rating agencies registered under SEBI are CRISIL, ICRA CARE, and Fitch India.<\/li>\n<li><strong>Lastly, a<\/strong>\u00a0<span style=\"text-decoration: underline;\">higher credit rating boosts the investor&#8217;s confidence<\/span> in a country. Because the higher rating will interpret <span style=\"text-decoration: underline;\">low risk and higher financial stability<\/span>.<\/li>\n<\/ul>\n<p><strong>What is Investment Grade Ratings?<\/strong><\/p>\n<ul>\n<li><strong>An investment-grade rating <\/strong>signifies the rating agency\u2019s belief that the rated instrument is likely to meet its payment obligations.<\/li>\n<li><strong>In the Indian context<\/strong>, debt instruments rated <strong>&#8216;BBB-&#8216;<\/strong> and above are classified as <strong>investment-grade ratings. <\/strong><\/li>\n<li><strong>Instruments with the ratings &#8216;BB+&#8217;<\/strong> and below are classified as speculative-grade category ratings\n<ul>\n<li><strong>Instruments rated in the speculative grade<\/strong>\u00a0are considered to carry materially higher risk and a higher probability of default compared to the investment grade.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Source: <\/strong><a href=\"https:\/\/epaper.thehindu.com\/Home\/MShareArticle?OrgId=GB78IGO6I.1&amp;imageview=0\"><strong>The Hindu<\/strong><\/a><\/p>\n<hr \/>\n<blockquote class=\"wp-embedded-content\" data-secret=\"2olOco4rVg\"><p><a href=\"https:\/\/forumias.com\/blog\/playing-musicial-instruments-as-a-hobby\/\">PLAYING MUSICIAL INSTRUMENTS as a hobby<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;PLAYING MUSICIAL INSTRUMENTS as a hobby&#8221; &#8212; Free UPSC IAS Preparation For Aspirants\" src=\"https:\/\/forumias.com\/blog\/playing-musicial-instruments-as-a-hobby\/embed\/#?secret=7M5nldVrlS#?secret=2olOco4rVg\" data-secret=\"2olOco4rVg\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the News? Standard &amp; Poor\u2019s Global Credit Ratings has organized a webinar titled \u201cWhat A Drawn Out Second Covid Wave Means For India\u201d. During that, the S&amp;P clarified that the pandemic won&#8217;t impact the &#8216;BBB-&#8216; rating of India for 2 years.\u00a0 What are the key outcomes of the webinar? An increase in coronavirus&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/the-pandemic-wont-impact-indias-credit-rating-for-2-years-standard-poorsp\/\">Continue reading <span class=\"screen-reader-text\">The pandemic won&#8217;t impact India\u2019s &#8220;credit rating&#8221; for 2 years &#8211; Standard &#038; Poor(S&#038;P)<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,1351,1310,3127,9],"tags":[1398],"class_list":["post-105685","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-daily-news","category-daily-news-updates","category-economy","category-public","tag-eco_6","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704862919},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/105685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=105685"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/105685\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=105685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=105685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=105685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}