Improving external balances and government actions may drive a sovereign rating upgrade for the country during the current calendar year, according to a report by Deutsche Bank.
It was despite the fact that market was not yet factoring in a rating upgrade, the report said.
“We assign a high likelihood of a sovereign ratings upgrade for India as most macro indicators have exhibited improvements in past two years,” DB India (rpt DB India), Managing Director and Head of Research, Abhay Laijawala said while unveiling ‘India equity strategy:2015 outlook’ here today.
The rating upgrade for the country will happen shortly, however it will depend on the forthcoming annual Budget, he said.
The BJP-led government at the Centre will present its first full-fledged annual budget for fiscal 2015-16 next month.
Talking about the key risk areas for the country’s economy, the report says that they will be guided by external factors rather than that of domestic reasons.
“Key risks for the country’s economy are more external than domestic ones in nature,” DB vice president Abhishek Saraf said adding, “We do see four areas of risks haunting the growth of the country’s economy.”
The four risk areas include stronger than anticipated slowdown in Europe and China, stronger than anticipated normalisation by US Fed and oil price holding, he added.
The economy has indeed witnessed a turnaround since 2012, when it faced imminent threat of ratings downgrade from global rating agencies.