Credit ratings agency Moody’s on Monday said India’s rating outlook is positive based on the strong growth potential of its economy. A statement by Moody’s Investors Service said the country’s credit profile is being supported by a large economy and a high private savings rate, which will help offset the risk of high government debt.

Policies implemented “over the next 12 to 18 months” along with narrower fiscal deficits will support growth, the statement said, according to Mint. It added that increased savings, investments and an inflation rate within the central bank’s targets will also improve India’s credit outlook. However, the agency said that the high number of non-performing loans in the banking sector along with slow policy reforms continue to be a source of risk for India’s ratings and economy. It added that there are potential longer-term gains to be had from the implementation of the Goods and Services Tax, even though there will be no “short-term boost to revenue”.

Earlier this month, Indian banks disclosed that there had been a 96% rise in the number of non-performing assets with a combined total of Rs 6.29 lakh crore in June 2016 as compared to Rs 3.20 lakh crore for the same period last year. The data on the bad loans was made available after the Reserve Bank of India ordered banks to undergo an asset quality review.