1. S&P retains India’s rating at BBB-, rules out upgrade

S&P retains India’s rating at BBB-, rules out upgrade

Global agency Standard and Poor's today ruled out any rating upgrade for India, though it said improvement in policymaking have raised the country's prospect for economic and fiscal performance.

By: | New Delhi | Published: October 19, 2015 7:54 PM
A rating constraint, S&P said is India's low GDP per capita, which "we estimate at USD 1,700 in 2015".  (Reuters)

A rating constraint, S&P said is India’s low GDP per capita, which “we estimate at USD 1,700 in 2015”. (Reuters)

Global agency Standard and Poor’s today ruled out any rating upgrade for India, though it said improvement in policymaking have raised the country’s prospect for economic and fiscal performance.

The agency retained India’s rating at ‘BBB-‘ with stable outlook and expressed hope that country’s economic growth would average about 8 per cent during 2015-18 period.

“We are affirming our ‘BBB-‘ long-term and ‘A-3’ short- term sovereign credit ratings on India,” it said.

‘BBB’ is the lowest investment grade rating and stable outlook reduces risk of possible sovereign rating downgrade.

The stable outlook, it said “balances India’s sound external position and inclusive policymaking traditions against the vulnerabilities stemming from its low per capita income and weak public finances.

“The outlook indicates that we do not expect to change our rating on India this year or next based on our current set of forecasts,” S&P said in a statement.

The agency also cautioned that downward pressure on the ratings could reemerge if growth disappoints (perhaps as a result of stalling of reforms), if, “contrary to our expectations, the new monetary council is not effective in achieving its targets, or if the external liquidity position of the nation deteriorates more than we currently expect”.

However, it added upward pressure on the ratings could build if the government’s reforms markedly improve its general government fiscal outturns and with them the level of net general government debt so that it falls below 60 per cent of GDP.

“Stable outlook indicates that we do not believe India’s public finances will improve sufficiently this year or the next to warrant an upgrade, nor that its economic, external, or monetary profiles will slip enough to prompt a downgrade,” the agency said.

A rating constraint, S&P said is India’s low GDP per capita, which “we estimate at USD 1,700 in 2015”.

India’s growth outperforms its peers and is picking up modestly, it added.

“Following India’s early 2015 rebasing of GDP, we expect GDP growth of 7.4 per cent in 2015 (6 per cent in GDP per capita terms) and for it to average just under 8 per cent over 2015-2018 (just under 7 per cent in GDP per capita terms).

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  1. R
    Rohan Thomas
    Oct 19, 2015 at 7:37 pm
    Is India really doing well? % wise, it maybe in front of China which is 30 years ahead of India but in absolute numbers, India is way behind. Also, India's infrastructure is still years behind (worse than Kenya's too when 1 reads what has been mentioned below) and the start of that could be the frequent power cuts all over the nation. ALL ABOUT INDIA (People would say India has made contributions a lot. Reality is it is nothing compared to China too including where China had 450 years of Golden Age compared to India's 200 years-can read all these points and more mentioned here under the BELOW LINK-statistics provided not just by world authorities but also by Indian ones)-India is a leader for corruption (ranked 85th in the world), MURDERS AND RAPES (ranked 2nd and 3rd respectively in the world), the leader in the world for pollution, AIDS since 1996, suicides, poverty and so on. It is 1 of the worst in the world when it comes to Infrastructure, Internet speed which includes the mobile broadband and so on. It also is way behind China when it comes to both Science and Innovations (Kuwait, Jordan and some of the African nations beats India for innovations and Innovations isn't same as Inventions, Discoveries and Creativity). India is also way behind when it comes to Education and Research also (Kenya beats India for research and Infrastructure too)(And don't group Non Residential Indians in same category for education and work experience INCLUDING leaders of top firms today as many have educational qualifications, professional certifications and work experience from abroad where people FOLLOW RULES too unlike India). India is also becoming a fat and lazy nation (3rd most obese nation in the world). All other nations that had the bad habits of eating junk including McDonalds, not exercising and so on are becoming health conscious while others that never had the junk food, they don't allow it in so much. McDonalds and others are falling apart in the US while it's gaining traction in India with its junk and 1 can read about it online itself. Just shows that India needs better awareness as most of its people are poor or low income (Yes, there is a correlation between lifestyles and incomes and the ones who are usually health conscious are the ones within the middle and high income sides though they too can be obese too but most of the time, it is within the poor and low income sides and India has 97% within the poverty and low income section. India says its middle cl to rich one is more than 3% though it isn't as most still can't afford good cars, tablets, washing machines, desktops, laptops, etc that the rest of the middle cl from other nations can. Also, the McDonalds and other junk food stuff is priced well enough in India for the low income onwards which includes both the true middle and high income people). productsofgreatindia.blogspot/2015/10/indian-products-infrastructure-telecom would show some of the statistics that India would need to improve on including the health, environment, safety, educational and other sides which are all given at the bottom of the site while top side of the site would provide India's flaws in Infrastructure, Internet and others too (poverty and low income statistics also provided).
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