S&P Global Ratings on Thursday affirmed India's sovereign rating at 'BBB-' with a stable outlook and said sound economic fundamentals will underpin growth over the next 2-3 years. The stable outlook on the long-term rating reflects S&P's view that India's strong economy and healthy revenue growth will support its weak fiscal settings.
"S&P Global Ratings affirmed its 'BBB-' long-term and 'A-3' short-term unsolicited foreign and local currency sovereign credit ratings on India. The outlook on the long-term rating is stable," the US-based agency said in a statement.
'BBB-' is the lowest investment grade rating. "India's economy is performing well amid challenging global conditions. We anticipate sound fundamentals to underpin growth over the next two to three years," S&P said.
The government will likely maintain elevated fiscal deficits and a large debt stock despite ongoing consolidation efforts, it added. Earlier this month, another global rating agency Fitch had affirmed India's sovereign rating at 'BBB-' with a stable outlook, citing robust growth and resilient external finances.
Meanwhile, Fitch on Tuesday affirmed India's sovereign rating at 'BBB-' with a stable outlook, on robust growth and resilient external finances, but said weak public finances remain a challenge.
India's rating has been unchanged at 'BBB-', which is the lowest investment grade, since August 2006.
"Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook," it said in a statement, adding strong growth potential is a key supporting factor for the sovereign rating.
It forecasts India to be one of the fastest-growing sovereigns globally clocking 6 per cent growth in the current fiscal (April 2023-March 2024) supported by resilient investment prospects. The agency estimates growth in the 2022-23 fiscal at 7 per cent and 6.7 per cent in 2024-25.