S&P maintains India rating on policy stability, infrastructure push
Global ratings agency S&P on Thursday affirmed India’s sovereign ratings at “BBB/A-2” with a “stable” outlook, citing continued policy stability and high infrastructure investment that supports the country’s long-term growth prospects. The affirmation comes despite risks from higher energy prices, which could strain India’s external balances and inflation outlook given its heavy reliance on…
S&P maintained India's sovereign rating at "BBB/A-2" with a "stable" outlook on Thursday, citing continued policy stability and substantial infrastructure investments that bolster the country's long-term growth potential. Despite risks stemming from higher energy prices, which could strain India's external balances and inflation outlook due to its heavy reliance on imported crude oil, S&P estimates India's real GDP growth to decelerate slightly to 6.6% in the current fiscal year.
However, the agency maintained the rating at the second-lowest investment-grade tier, highlighting concerns over weak fiscal performance, a heavy debt burden, and low GDP per capita. Fitch echoed this sentiment, affirming India's rating at "BBB-" while flagging youth job risks to the nation's fiscal profile. India's economic growth is believed to have slowed to 7.1% in the April-June quarter, according to a Reuters poll of economists, reflecting softer private investment, partially offset by resilient consumer spending and government expenditure.
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