"India is less exposed to global risks because of its more resilient economic growth and the impact of positive policy reforms momentum," the rating agency said.
Emerging market sovereigns have diverging shock-absorption capabilities to withstand the risks that will continue to impact global credit quality in 2015-16, says Moody's in a report published today.
The report focuses on five Baa-rated sovereigns – Turkey, Brazil, South Africa, India and Indonesia.
"India is less exposed to external shocks than the other sovereigns discussed here. The positive outlook on its Baa3 rating reflects our view that the relatively resilient growth and the policy reform momentum will slowly stabilise inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios," it said.
It also talks of country-specific challenges exacerbating this external risk.
"In contrast, we forecast strong growth in India of around 7-7.5 percent per year in 2015-16, the highest among the G20 economies, which is supported by lower oil prices that will reinforce gradual growth-enhancing reforms," it said.
Moody's said although India, South Africa and Brazil have weaker fiscal positions than Turkey and Indonesia, these governments are less reliant on foreign currency and non-resident funding (government external debt).


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