New Delhi, Aug. 12 -- In August 2025, S&P Global raised India's credit rating to BBB, the first upgrade in 18 years. Morningstar DBRS and Japan's R&I followed suit. Fitch and Moody's held theirs, pointing to the same figure: government debt of around 84% of GDP, against a level closer to 60% for countries in India's rating band.

A sovereign rating is a judgement about whether a government will repay what it owes. Agencies publish the factors they consider, including growth, deficits, debt and institutions, but not how much each counts for.

New research by Olivier Blanchard, Daniel Leigh and this author fills that gap. With data from more than 130 countries over 30 years, the study examines what ratings respond to and compares it with wh...