Rating agency Standard & Poor (S&P) announced on Wednesday a revision in the outlook for the Indian economy from ‘stable’ to ‘positive’, while affirming the overall rating at ‘BBB-’, which represents the lowest investment grade rating.
The move comes amid India’s robust economic growth, which has yielded positive impacts on credit metrics, according to S&P. The rating agency noted that the government’s significant infrastructure investments are poised to bolster India’s growth trajectory. Moreover, it expressed confidence in the continuity of India’s reform agenda, irrespective of the outcome of upcoming elections.
Last year in May, S&P Global Ratings upheld India’s sovereign rating at ‘BBB-’ for the long term and ‘A-3’ for the short term, maintaining a stable outlook. At that time, the rating agency highlighted sound economic fundamentals expected to support growth over the following two to three years, despite concerns over weak fiscal performance and low gross domestic product (GDP) per capita.
Today’s announcement by S&P aligns with similar ratings from other global agencies, including Fitch and Moody’s, which also assigned the lowest investment grade rating to India with a stable outlook.
“We expect sound economic fundamentals to underpin the growth momentum over the next two to three years,” the ratings firm said in a statement.
Additionally, the agency expressed expectations of continued economic reforms and fiscal policies, regardless of the outcome of upcoming elections.
Investors closely monitor these ratings as indicators of a country’s creditworthiness, which can impact borrowing costs and overall investor sentiment.
First Published: May 29 2024 | 2:05 PM IST
