S&P Global noted that the stable outlook reflects the view that continued policy stability and high infrastructure investment will support India’s long-term growth prospects.
1 / 6Upgrade from BBB- to BBB | Ratings agency S&P Global has upgraded India’s sovereign rating to BBB, which is one notch up from its previous rating of BBB- on Thursday, August 14, just a day ahead of India’s 79th Independence Day. (Image: Canva)
2 / 6Stable outlook | The agency maintained a stable outlook on India, citing economic growth and the government’s commitment to fiscal consolidation as key reasons for the upgrade. It also noted that India’s economy is likely to grow by 6.8% annually over the next three years. (Image: Canva)
3 / 6Long-term growth | S&P Global noted that the stable outlook reflects the view that continued policy stability and high infrastructure investment will support India’s long-term growth prospects. “That, along with cautious fiscal and monetary policy that moderates the government’s elevated debt and interest burden, will underpin the rating over the next 24 months,” it said.
4 / 6Short-term rating upgrade | The short-term rating, too, has been revised to A-2 from A-3 while the transfer and convertibility assessment has been revised to A- from BBB+. (Image: Canva)
5 / 6The agency expects sound economic fundamentals to sustain growth momentum over the next two to three years, and that the country’s robust economic expansion is having a constructive effect on India’s credit metrics (Image: Canva)
6 / 6A “long-overdue” move | Kanika Pasricha, Chief Economic Adviser at Union Bank of India, told CNBC-TV18 that the upgrade is a surprising but positive move. “Recently, when we were speaking to S&P, it was not expected that the move will come in. But I would just say it is very long overdue, given our macro stability dynamics. We are still the fastest growing economy in the world, and the way we have seen improvement in inflation, fiscal current account dynamics so, all this is playing out,” she said.
