Mumbai, Aug. 27 -- S&P Global Ratings on Thursday retained India's sovereign rating at 'BBB' with a stable outlook, saying India is a dynamic and fast-growing economy with policy predictability.
S&P said high energy prices and challenging agricultural conditions will marginally slow India's growth this year, but economic fundamentals are expected to remain sound and support robust growth over the next two to three years.
"The sovereign credit ratings on India are anchored by a dynamic and fast-growing economy, strong external balance sheet, and stable institutions that support policy predictability," S&P said while affirming its 'BBB' long-term and 'A-2' short-term unsolicited sovereign credit ratings on India.
The outlook on the long-term rating is stable.
The 'BBB' is the lowest investment-grade rating.
Counterbalancing the strengths are the government's weak fiscal performance and burdensome debt stock, as well as low GDP per capita, the US-based agency said.
The stable outlook reflects S&P's view that continued policy stability and high infrastructure investment will support India's long-term growth prospects.
The growth outlook, along with stable fiscal and monetary policies that moderate the government's elevated debt and interest burden, will underpin the rating over the next 24 months, it added.
India remains among the best-performing economies in the world, with an average annual growth of 7.9 per cent in the last five years, from fiscal 2022 (year-ended March 31, 2022) to fiscal 2026.
Published by HT Digital Content Services with permission from Millennium Post.