S&P Global has upgraded its outlook on India's credit rating, citing continued policy stability, deepening economic reforms, and substantial infrastructure investments as key factors sustaining the country’s long-term growth prospects.
The rating agency elevated its outlook from stable to positive, while maintaining the sovereign rating at 'BBB-', the lowest tier of investment grade.
S&P Global pointed out that cautious fiscal and monetary policies are effectively reducing elevated government debt and the interest burden, thereby enhancing economic resilience. This scenario could potentially lead to a higher rating within the next 24 months.
"India's robust economic expansion is having a constructive impact on its credit metrics," stated S&P Global.
The Indian economy is projected to grow at an annual rate of nearly 7.0 percent over the next three years. Such growth is expected to moderate the government debt-to-GDP ratio, despite prevalent fiscal deficits.
The rating agency anticipates broad continuity in economic reforms and fiscal policies, irrespective of future election outcomes.
The composition of government spending has shifted, with a greater emphasis on infrastructure. This transformation is expected to alleviate bottlenecks, positioning the nation on a higher growth trajectory, according to the agency.
