S&P raises outlook for India to ‘positive’
New Delhi, May 29
After a gap of about 10 years, S&P Global Ratings on Wednesday upped India’s outlook to positive from stable on robust growth prospects for next three years and public spending, and raised hopes for an upgrade in two years provided the government continues reforms and policies to keep fiscal deficit under check.
While retaining India’s sovereign rating at the lowest investment grade of ‘BBB-’, S&P said it expects broad continuity in economic reforms and fiscal policies, irrespective of the election outcome.
Results of the ongoing general elections will be announced on June 4.
“India outlook revised to positive on robust growth and rising quality of Government spend,” S&P said, while affirming long-term rating at ‘BBB-’.
The ratings are looked at by investors as a barometer of the country’s creditworthiness and has impact on borrowing costs. Last in 2014, S&P had upped India’s outlook to stable from negative.
“Our positive outlook on India is predicated on its robust economic growth, pronounced improvement in the quality of government spending, and political commitment to fiscal consolidation. We believe these factors are coalescing to benefit credit metrics,” S&P said.
