S&P Global Upgrades India's Outlook to Positive Amid Robust Economic Growth
Global rating agency S&P Global has revised India's outlook from stable to positive, acknowledging the nation's impressive long-term economic growth and political stability. The agency highlighted that India's continued policy stability, deepening economic reforms, and substantial infrastructure investments are key factors sustaining its long-term growth prospects.
"The positive outlook reflects our view that continued policy stability, deepening economic reforms, and high infrastructure investment will sustain long-term growth prospects", S&P Global stated. The agency noted that prudent fiscal and monetary policies are expected to reduce the government's debt and interest burden, thereby enhancing economic resilience. This financial prudence could potentially lead to a higher rating within the next 24 months.
S&P Global also indicated that a significant and sustained improvement in the central bank's monetary policy effectiveness and credibility, particularly in managing inflation at a consistently lower rate, could contribute to a higher rating. "We may also raise the ratings if there is a sustained and substantial improvement in the central bank's monetary policy effectiveness and credibility, such that inflation is managed at a durably lower rate over time", the agency remarked.
However, the rating agency warned that it might revert the outlook to stable if there is a weakening in political commitment to sustainable public finances. S&P Global affirmed its 'BBB-' long-term and 'A-3' short-term unsolicited foreign and local currency sovereign credit ratings, emphasizing that sound economic fundamentals are expected to underpin India's growth momentum over the next two to three years. This outlook revision underscores India's strong economic potential and the importance of maintaining robust fiscal and monetary policies to ensure continued progress and stability.
