S&P upgrades India's credit rating to stable

S&P upgrades India's credit rating to stable

STANDARD & Poor's on Friday improved India's outlook 10 stable from negative, saying the new political formation at the Centre has the capacity to push reforms and put the country back on high growth trajectory.

"We could raise the rating if the economy reverts to a real per capita GDP trend growth of 5.5 per cent per year and fiscal, external, or inflation metrics improve." the global rating agency said.

The revision in outlook comes ahead of Prime Minister Narcndni Modi's high profile visit to the US. which among things is aimed at procuring investments. Modi is scheduled to meet top US corporate.

The stable outlook, it said, reflects the agency's expectation that the newly elected Government will he able to implement reforms that spur growih. which in turn improves fiscal performance.

S&P affirmed !he 'BBB-/A-3" sovereign credit rating on India and revised the outlook on the long-term rating to stable from negative. Stable outlook reduces risk of any possible sovereign rating downgrade.

"The stable outlook for the next 24 months reflects our view that the new Government has both the willingness and capacity to implement reforms necessary to restore some of India's lost growih potential, consolidate its fiscal accounts, and permit the RBI 10 carry out effective monetary policy." it added.

S&P also cautioned that it could lower the rating in case the Government's structural reform agenda stalls such that economic growth does not accelerate, or fiscal and debt ratios fail to improve.

Posted in: News 2014