<div>India's sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery, Moody's Investors Service said in a release on Thursday.<br /><br />"Recurrent inflationary pressures ... keep domestic capital costs high, erode domestic purchasing power as well as savings and lower international competitiveness," the rating agency said.<br /><br />Moody's also said the supply response to inflation has been weak and the government-directed food distribution system has made worse the food supply constraints.<br /><br />Without a significant increase in food output, the risk from continued inflation could limit India's growth prospects, Moody's said.<br /><br />(Reuters)</div>
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