Published: Fri, November 24, 2017
Finance | By Loren Pratt

S&P maintains status quo, keeps outlook on India stable

S&P maintains status quo, keeps outlook on India stable

These strengths are balanced against vulnerabilities stemming from the country's low per capita income and relatively high general government debt stock, net of liquid assets. An upgrade for India's ratings will be highly positive for the bond market and also reduce interest costs for both the government as well as companies raising funds from overseas.

"Downward pressure on the ratings could emerge if GDP growth disappoints, causing us to reassess our view of trend growth; if net general government deficits rose significantly; or if the political will to maintain India's reform agenda significantly lost momentum", it added. After Moody's recent upgrade, there were expectations that S&P may upgrade India's sovereign rating.

Ending all the ongoing economic discussion, Standard & Poor's has released its latest ratings and the Indian rating has remained unchanged.

Railways and Coal Minister Piyush Goyal said S&P has been historically more conservative and follows Moody's.

The government, though, maintains that the government was on course to meet the fiscal deficit target.


"The S&P is coming out with its review, we are bracing for both a positive and a negative outcome of their assessment", a senior finance ministry official has told the Indian Express.

The Moody's ratings, on November 17, had come after a wait of 14 years.

In August 2006 Fitch Ratings upgraded India to investment grade at "BBB-', with a stable outlook, from BB+". It affirmed A-3 short-term sovereign credit rating on India. The agency has now changed India's outlook to stable from positive.

However, the report noted that growth in the medium term will be supported by the bank recapitalisation plan and public-sector-led infrastructure investment, which is expected to stimulate economic activity along with robust private consumption.

"India's general government revenue, at an estimated 22 percent of 2017 GDP, is low compared with peer sovereigns".

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