S&P revises India outlook to stable from negative; Ratings affirmed at 'BBB-/A-3'

SINGAPORE - Standard & Poor's has revised its outlook to stable from negative and affirmed its 'BBB-' long-term and 'A-3' short-term unsolicited sovereign credit ratings on India. Its our transfer and convertibility assessment is confirmed at 'BBB+'.

S&P says the outlook revision reflects its view that India's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management.

“India's external position is a key credit strength. The country has relatively little external debt and a much improved external liquidity position. We project that, at the fiscal year end of March 31, 2015, external debt net of external assets will be 6% of current account receipts,” S&P says.

S&P says it believes the current Government will remedy, to varying degrees, India’s growth impediments - policy paralysis, energy supply bottlenecks, and administrative obstacles. The ratings agency is projecting India’s real per capita GDP growth to reach 5% by next year, with per capita GDP to surpass US$2,000 by 2017.

“We could raise the rating if the economy reverts to real per capita GDP trend growth of 5.5% per year and fiscal, external, or inflation metrics improve. Conversely, we may lower the rating if the Government's structural reform agenda stalls such that economic growth does not accelerate, or fiscal and debt ratios fail to improve.” www.standardandpoors.com (ATI).