India Ratings

On May 29, 2024, S&P Global Ratings revised India’s outlook to positive from stable and affirmed its ‘BBB-‘ long-term and ‘A-3’ short-term unsolicited foreign and local currency sovereign credit ratings. The transfer and convertibility assessment remains ‘BBB+’.

India’s strong economic growth is positively affecting its credit metrics. S&P Global anticipates that the country’s solid economic fundamentals will sustain this growth momentum over the next two to three years. Regardless of the election outcomes, S&P Global expects a continuation of economic reforms and fiscal policies. The government’s spending composition has shifted significantly towards infrastructure, which is expected to alleviate bottlenecks and propel the country towards a higher growth trajectory. Although high fiscal deficits, substantial debt, and interest burdens persist, the government is prioritizing ongoing consolidation efforts. Consequently, S&P Global has revised its outlook on India from stable to positive and affirmed its ‘BBB-/A-3’ sovereign credit ratings.

The positive outlook reflects S&P Global’s belief that continued policy stability, deepening economic reforms, and substantial infrastructure investment will sustain long-term growth prospects. Alongside prudent fiscal and monetary policies, this will reduce the government’s high debt and interest burden while strengthening economic resilience, potentially leading to a higher rating within the next 24 months.

S&P Global has stated that it may raise the ratings if India’s fiscal deficits decrease significantly, reducing the net change in general government debt to below 7% of GDP on a structural basis. Continuous public investment in infrastructure, combined with fiscal adjustments, could improve India’s weak public finances. S&P Global may also upgrade the ratings if it observes a sustained and substantial improvement in the central bank’s monetary policy effectiveness and credibility, leading to lower and more stable inflation rates over time.

On the other hand, the outlook could be revised to stable if there is a decline in political commitment to maintaining sustainable public finances, indicating a weakening of the country’s institutional capacity. Additionally, if current account deficits significantly widen, weakening India’s external position and making it a net external debtor, S&P Global may also revise the outlook to stable.


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