Global rating agency Standard & Poor (S&P) announced 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 transfer and convertibility assessment remains 'BBB+'.
The positive outlook reflects expectations of sustained policy stability, deepening economic reforms, and high infrastructure investment, which are anticipated to support long-term growth prospects.
Coupled with cautious fiscal and monetary policies, these factors could diminish the government's elevated debt and interest burden, bolstering economic resilience and potentially leading to a higher rating within the next 24 months, S&P said.
In May last year, S&P 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.
With the latest 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.
