S&P maintains India rating on policy stability, infrastructure push

Global ratings agency S&P on Thursday affirmed India’s sovereign ratings at “BBB/A-2” with a “stable” outlook, citing continued policy stability and high infrastructure investment that supports the country’s long-term growth prospects.

The affirmation comes despite risks from higher energy prices, which could strain India’s external balances and inflation outlook given its heavy reliance on imported crude oil.

S&P estimates India’s real GDP growth to ease slightly to 6.6% this year, a pace it said remains strong compared with most emerging-market peers amid a broad global slowdown.

But the agency kept the sovereign at the second-lowest investment-grade rung, flagging concerns over weak fiscal performance, heavy debt burden and low GDP per capita.

Fitch affirms India rating on robust growth, flags youth job risks to fiscal profile

India’s economic growth likely slowed to 7.1% in the April-June quarter from a year earlier, according to a Reuters poll of economists, reflecting softer private investment, partly offset by resilient consumer spending and government expenditure.

Earlier this month, Fitch also affirmed India’s rating at “BBB-”, citing robust growth balanced against still-weak fiscal metrics.