‘Regardless of election outcome…’: S&P revises India’s outlook to positive from stable

S&P has revised India’s outlook to positive from stable. “We expect sound economic fundamentals to drive growth over the next two to three years. Regardless of the election outcome, we anticipate continuity in economic reforms and fiscal policies,” the agency stated. 

S&P cited potential for an upgrade if fiscal deficits significantly narrow. It said a meaningful reduction in fiscal deficits could bring the net change in general government debt below 7% of GDP on a structural basis, which would be a crucial factor for a rating increase.

S&P noted, “The sustained rise in public investment in infrastructure is expected to boost economic growth. Coupled with fiscal adjustments, this could improve India’s weak public finances.”

The agency remains optimistic about India’s economic prospects, anticipating continuity in economic reforms and fiscal policies despite potential political changes.

S&P Global also affirmed its ‘BBB-‘ long-term and ‘A-3’ short-term ratings for India’s foreign and local currency sovereign credit. 

The positive outlook reflects expectations of policy stability, economic reforms, and high infrastructure investment supporting long-term growth.