New Delhi: Rating agency S&P has reaffirmed India’s sovereign credit rating with stable outlook and expects Asia’s third largest economy to grow strongly over the next two years, India’s finance ministry said citing a summary publication from the rating agency.
Economic Affairs Secretary Atanu Chakraborty said in a tweet on late Tuesday evening that S&P has reaffirmed sovereign rating of India at BBB- with stable outlook. “They have stated that India’s economy continues to achieve impressive long-term growth rates despite a recent deceleration," Chakraborty said in his tweet.
“India’s economy continues to achieve impressive long term growth rates despite a recent deceleration. It is believed that the economic slowdown is cyclical rather than structural," a finance ministry statement said quoting S&P’s summary publication on India. “They expect the economy to continue to outperform its peers on the back of rising domestic demand and strong demographics," said the ministry statement.
S&P’s rating action follows Moody's Investors Service’s lowering of India’s rating outlook to ‘negative’ from ‘stable’ recently.
The stable outlook is on the basis of expectation that over the next two years, growth will remain strong and India will maintain its sound net external position and fiscal deficit will remain elevated but broadly in line with S&P’s forecast’, the ministry said.
The rating action comes at a time the economic growth rate has slowed down to 4.5% in the September quarter from 5% in the June quarter on account of a contraction in manufacturing.