• Global rating agency Standard and Poor’s on Monday warned that “the balance of risk factors” for India’s sovereign credit rating could tilt towards “negative” this year, given the headwinds being faced by the country on domestic and global fronts.
  • However, S&P maintained that it does not expect to downgrade or revise its “stable” outlook on the investment grade ‘BBB −’ long-term sovereign credit rating on India in the near future.
  • At the same time, S&P said, India is battling with high inflation, a weak government fiscal position, and slower economic growth on domestic front, while European sovereign debt problems could add to the pressures for the country.
  • “Like many countries, India is facing some challenges on a few fronts, and the balance of risk factors for the sovereign credit rating may be shifting slightly toward the negative,” S&P said in a report.
  • “India has been grappling with a political gridlock and the government’s ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence,” S&P credit analyst Takahira Ogawa said.
  • “Our stable outlook on the ‘BBB −’ long-term rating on India currently reflects our expectation of strong economic growth in the medium term and gradually improving fiscal performances,” Mr. Ogawa said.