According to NDTV, S&P Global upgraded India’s sovereign outlook on Wednesday from “stable” to “positive,” highlighting the nation’s steady policies, economic reforms, and infrastructure spending. The rating agency upheld its unsolicited foreign and local currency sovereign credit ratings of “A-3” for short-term and “BBB-” for long-term.
According to NDTV, S&P Global stated, “The positive outlook reflects our view that sustained policy stability, deepening economic reforms, and high infrastructure investment will sustain long-term growth prospects.” This modification is made in conjunction with the April–May national elections in India, where around 100 crore eligible voters choose representatives for 543 seats in the lower house, the Lok Sabha.
S&P Global anticipates that, irrespective of the election results, budgetary and economic reforms will mostly continue.
According to Madan Sabnavis, chief economist of Bank of Baroda, the recent improvement of the Indian economy’s rating by S&P Global may set the precedent for other rating agencies to follow suit. Given that they have acknowledged it, it is a huge step in the right direction.
S&P Global anticipates that prudent monetary and fiscal policies will lessen the government’s debt and interest burden, enhancing economic resilience and perhaps leading to a rating increase in the following 24 months. The agency may decide to raise India’s ratings if the country’s fiscal deficits drastically reduce and the country’s overall public debt falls to less than 7% of GDP.