S&P Upgrades India's Rating Outlook

S&P Global Ratings raised its outlook on India's credit rating as continued policy stability, deepening economic reforms and high infrastructure investment would help to sustain long-term growth prospects.

The rating agency lifted its rating outlook to positive from stable and maintained the sovereign rating at 'BBB-', which is the lowest investment grade.

S&P Global said the cautious fiscal and monetary policy reduces the elevated government debt and interest burden, while bolstering economic resilience. This could lead to a higher rating over the coming 24 months, the agency added.

"India's robust economic expansion is having a constructive impact on its credit metrics," said S&P Global.

 

The economy is forecast to grow close to 7.0 percent annually over the next three years. This has a moderating effect on the ratio of government debt to GDP despite still-wide fiscal deficits.

Regardless of the election outcome, the rating agency forecast broad continuity in economic reforms and fiscal policies.

The composition of government spending has transformed with share of infrastructure going up. This would help to ease bottlenecks to put the nation on a higher growth trajectory, the agency noted.

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