Moody’s Report: India will be having highest debt compare to China- Brazil

New Delhi. The latest report by Moody’s Investors Service, the world’s largest rating agency, states that by 2021, India may have the highest debt burden in emerging markets. The GDP will decline more due to the coronavirus and increasing fiscal deficit will have a major impact on the emerging markets economy.

Debt will increase – According to the GDP data on Monday evening, in the first quarter of the current financial year, India’s GDP has recorded a negative growth of 24 percent. Moody report states, ‘due to the increased primary deficit in emerging market economies, their debt burden may increase by 10 per cent by the year 2021 compared to 2019’.

The condition of state-run banks in India deteriorated. The state run banks have  70 percent stake in banking system assets. The rating agency of the US said, ‘medium-term growth and fiscal challenge in India are actually indicating risk. This makes sense that in the coming time the government’s income may remain low’.

Moody’s said, some of these will also have a burden of paying higher interest, which will further increase the debt burden of developed countries.

Moody’s said, ‘due to a weak financial system and contingent liability, the risk of debt is high for India, Mexico, South Africa and Turkey. The agency said, due to increasing pressure on India’s financial system, the risk may increase further. Banks in India are struggling with the problem of weak asset quality despite steps taken to tackle the problem of rising NPAs.