Sovereign ratings agency S&P Global has announced a positive outlook for India, moving it from stable to positive. This decision comes after the country’s ongoing economic reforms and expansions show a consistent growth momentum. With general elections taking place on June 4th, S&P noted that India has made an impressive recovery from the COVID-19 pandemic.
S&P’s positive outlook is based on several factors, including the country’s continued policy stability, deepening economic reforms, and high infrastructure investment. The agency also highlighted the impact of cautious fiscal and monetary policies in reducing the government’s debt and interest burden while enhancing economic resilience. S&P believes these factors could potentially lead to a higher rating for India within the next 24 months.
India has shown strong economic performance in recent years, with an average annual real GDP growth of 8.1%, the highest in the Asia-Pacific region. S&P expects this growth trend to continue in the medium term, projecting GDP expansion close to 7.0% annually over the next three years. The Reserve Bank of India’s annual report also forecasts a 7% growth rate for the Indian economy in the current fiscal year beginning in April.
Despite ongoing elections, S&P has maintained its sovereign credit ratings for India at ‘BBB-/A-3’. The agency expressed confidence that regardless of election outcomes, incoming governments will continue with economic reforms to support India’s growth momentum.
