Standard & Poor's Global Ratings has retained India's sovereign ratings at 'BBB-' with stable outlook, saying the country's GDP growth is likely to gradually recover towards longer-term trend rates over the next 2-3 years.
But India's fiscal position remains precarious with elevated fiscal deficit and net government indebtedness, the ratings agency said. Fiscal deficits have exceeded the government's target, S&P said, adding it expect limited consolidation over next few years.
"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," according to a statement.
Also Read: India's Sustainable GDP Growth Rate At 6-7%: V Anantha Nageswaran
India's GDP growth rate is estimated at 5 percent in 2019-20. The government expects the growth to rebound to over 6 percent in the next financial year.
S&P's India ratings reflect the country's above-average real GDP growth rate, sound external profile, and evolving monetary settings, the ratings agency said, adding that India's strong democratic institutions promote policy stability and compromise, and also underpin the ratings.
These strengths are balanced against vulnerabilities stemming from India's low per capita income and consistently elevated fiscal deficits that contribute to high general government debt, net of liquid assets, the statement said.
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