S&P maintains India rating on policy stability, infrastructure push

Business Recorder reported that S&P confirmed India's sovereign ratings at BBB/A-2 on Thursday, keeping the outlook stable. The agency pointed to steady policy direction and large infrastructure spending as supports for India's long-term expansion. Its view also acknowledges that rising energy costs could put pressure on the country's external accounts and inflation path, since India imports much of its crude.

S&P expects real GDP growth to slow slightly to 6.6% this year, which it still regards as solid against most developing peers while the global economy cools. However, the agency retained the rating one notch above the lowest investment-grade level, citing a weak fiscal record, a large debt load and modest income per person.

A Reuters poll of economists projects growth of 7.1% for the April-June quarter compared with a year earlier, a slowdown linked to weaker private investment and partly cushioned by consumer demand and public spending. Separately, Fitch affirmed its BBB- rating earlier this month, citing strong growth against fiscal metrics that remain weak.