S&P differs from Moody's, Keeps India's rating at BBB Grade

INDORE, India - Nov. 25, 2017 - PRLog -- Credit rating agency Standard & Poor's (S&P) on Friday retained its India rating unchanged at  BBB grade, the lowest investment grade, with a stable outlook, citing a sizeable fiscal deficit, high general govt debt & low per capita income. The move may perhaps disappoint investors, who pushed the BSE Sensex for the seventh successive trading day on week ended Friday on hopes of another rating upgrade.
The Modi government was hoping an upgrade following one by Moody's upgrade last week. Moody's  has raised India's sovereign rating from the lowest grade mark of investment as Baa3 to Baa2, and changed the outlook from "Stable" to "Positive", on hopes  that the govt continued focus on economic and institutional reforms will enhance India's high growth potential ultimately.
Standard & Poor's (S&P) said in its in a statement that the 'stable' rating outlook reflects its view that over the upcoming  2 years, India's growth will remain strong, it will keep up  its sound external account position and fiscal deficits will continue broadly in line with expectations. However, the govt on Friday expressed relief that Standard & Poor's had not downgraded India's sovereign ratings.
S&P spelled out that upward pressure on the ratings could build if the govt's reforms noticeably improve its net general govt fiscal deficit and lead to a reduction in the level of net general govt debt.

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