Key highlights:
- Global growth is projected to moderate to 3% in 2023 from an estimated 3.5% in 2022.
- India’s merchandise exports continue to feel the heat of global demand slowdown and trade deficit has shown signs of widening in recent months.
- Amid the global challenges, India’s economic growth accelerated to 7.8% in Q1 FY24 from 6.1% in the previous quarter and high-frequency economic indicators also depict resilience.
- CareEdge Ratings’ credit ratio has moderated in this backdrop to 1.67 in H1FY24, down from 2.72 seen in H2FY23. Nevertheless, upgrades still continue to outnumber downgrades with 217 upgrades and 130 downgrades during H1 FY24..
- The credit ratio for the manufacturing and services sector during H1FY24 dipped to 1.38, down from 2.69 in H2FY23.
- In the infrastructure sector, the credit ratio continues to remain strong at 2.21 in H1FY24, though moderating from 3.10 in H2FY23.
- The credit ratio for the Banking & Financial Services (BFSI) sector improved sharply to 4.20 in H1FY24 from 1.91 in H2FY23 with upgrades seen in both, NBFCs and banks.
- Going ahead, the cumulative impact of interest rate hikes, volatile crude oil prices, and geopolitical risks remain the key monitorables.
