S&P Global Ratings Wednesday affirmed its ratings on the country’s long-term foreign and local currency sovereign credit at lowest investment grade and maintained a stable outlook, arguing that “India’s economy is likely to achieve a strong recovery following the deep contraction in this fiscal year; forecasting real GDP growth at 8.5 per cent” in FY22.
It affirmed India’s long-term rating at ‘BBB-’ with a stable outlook and short term rating at ‘A-3’. S&P also said the economy faces stark challenges in the near-term.
Relief after Moody’s action
THE S&P review will give relief to policy makers and financial markets participants, especially after a downgrade by Moody’s last week heightened risks of India slipping into a non-investment grade rank.
Meanwhile, Fitch Ratings said that after a 5 per cent contraction in the current fiscal, the country’s economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health.
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