The S&P Global Ratings have affirmed India's sovereign rating at ‘BBB-' for the 14th consecutive year. The rating is the lowest grade. S&P, however, has maintained a 'stable' outlook on the country.
In a statement, S&P said that the sovereign credit ratings on India reflect the economy’s above-average long-term real GDP growth, sound external profile, and evolving monetary settings.
S&P said that India’s democratic institutions promote policy stability and compromise, and also underpin the ratings. These strengths are balanced against vulnerabilities stemming from the country’s low per capita income and weak fiscal settings, including consistently elevated general government deficits and indebtedness.
Further, the rating agency said that the stable outlook reflects our expectation that India’s economy will recover following the resolution of the COVID-19 pandemic, and that the country’s strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24-months.
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