MUMBAI: According to a report from Moody's on Tuesday, the impact of the Russia-Ukraine crisis, increased inflation, and tightening financial conditions globally as a result of tightening policies are unlikely to impede India's ongoing recovery from the epidemic in 2022 and 2023.

According to the announcement, Moody's has maintained India's sovereign rating at Baa3 with a stable outlook.

"The stable prognosis reflects our belief that the risks from adverse feedback between the financial sector and the economy are diminishing.

"Banks and nonbank financial institutions (NBFIs) offer significantly less risk to the sovereign than we originally anticipated due to better capital buffers and greater liquidity, helping the ongoing economic recovery. We anticipate that the economic situation will allow for a modest narrowing in the general government fiscal deficit over the next few years, avoiding further deterioration in the sovereign credit profile, even though risks resulting from a high debt load and inadequate debt affordability remain.

According to the press release, the ratings agency may raise India's rating if its economic growth potential exceeds their projections, supported by the successful implementation of financial and economic sector reforms that resulted in a significant and sustained increase in private sector investment.

The announcement went on to say that the credit profile would also be supported by the "effective implementation of fiscal policy measures that resulted in a sustained fall in the government's debt load and improvements in debt affordability."

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