Latest news with #sovereigncreditrating
Times of Oman
4 days ago
- Business
- Times of Oman
Experts hail S&P's upgrade of India's sovereign rating to BBB, calling it 'long overdue'
New Delhi: Economists and market experts have welcomed S&P Global Ratings' decision to upgrade India's sovereign credit rating from BBB- to BBB, terming it a recognition of the country's strong fundamentals, sound fiscal management, and growing global economic clout. In a significant boost to investor confidence, S&P Global Ratings has upgraded India's long-term unsolicited sovereign credit rating to 'BBB', while also raising the short-term rating to 'A-2' from 'A-3'. The outlook on the long-term rating remains stable, reflecting optimism around India's policy continuity, robust economic growth, and improved fiscal management. Alongside the rating upgrade, S&P also revised its transfer and convertibility assessment for India to 'A-' from 'BBB+', citing an improved monetary and external environment. According to S&P, the stable outlook suggests confidence in India's ability to sustain its growth trajectory, driven by high levels of infrastructure investment and a disciplined policy environment. The Ministry of Finance said the rating improvement "reaffirms that under Prime Minister Narendra Modi's leadership, providing stability, India's economy is truly agile, active, and resilient." It noted that India has kept fiscal discipline a priority while pushing infrastructure growth and inclusive development. These factors, it added, have played a key role in achieving the upgrade. The Finance Ministry stated that India will "continue its buoyant growth momentum and undertake steps for further reforms to attain the goal of Viksit Bharat by 2047," underscoring that the current direction of fiscal and economic policy will remain unchanged. Union Minister of Commerce & Industry, Piyush Goyal, also emphasised that India is prioritising fiscal consolidation, maintaining a strong infrastructure creation drive, and advancing an inclusive growth approach. "This is also a testament that at the heart of our journey towards Viksit Bharat lies our economic resilience and our government's unwavering commitment to ensure a better life for every Indian," he stated in a tweet. Sanjeev Sanyal, Member of the Prime Minister's Economic Advisory Council, called the upgrade "much required" and said his own assessment had suggested India deserved a higher rating. "I am pleased to hear that S&P has upgraded India's sovereign rating to BBB from BBB-. This was much required because, as I have said before, the difference between what the ratings were being given by the three big rating agencies and my own model suggested was a gap of two notches," Sanjeev Sanyal, Member of Prime Minister Narendra Modi's Economic Advisory Council. Sonal Badhan, Economist at Bank of Baroda, said the move would boost investor confidence and aid capital flows. "In both the short and long term, foreign capital inflows can be expected to be impacted positively, as the upgrade reaffirms trust in India's 'sound fundamentals' and 'growth momentum'. We are likely to see higher FPI inflows this year and a decline in bond yields," she noted. Rishi Shah, Partner & Economic Advisory Services Leader at Grant Thornton Bharat, described the decision as "long overdue," adding, "India's fundamentals were such that this rating upgrade should have happened before time. Our fiscal management and monetary management have been excellent since Covid, especially compared to the rest of the world." Manoranjan Sharma, Chief Economist, Infomerics Ratings, said, "It is a recognition of India's growing financial might and clout on the global scene. India has arrived on the global scene, and this is a fair recognition of the kind of influence India has, both economically and materially. This will also have an important implications for India, both at the level of macro economy, and also for case of companies, when we raise loans abroad, this improved rating will significantly lower the rate of interest on our loans and advances, and to that extent, it will be beneficial both to the Indian economy and also to a large number of firms who raise Money in the international market." Rishi Shah (Partner & Economic advisory services leader, Grant Thornton Bharat) on S&P upgraded sovereign rating of India from BBB- to BBB, "This is a positive development, long overdue. India's fundamentals were such that this rating upgrade should have happened before time. They have implemented changes slightly in a delayed fashion, especially since Covid, because our fundamentals have been improving since then. This is partly due to a drop in them because of COVID and the measures the government had to take. But more importantly, these need to be seen in a relative sense. How well have we done since COVID, as opposed to the rest of the world? I think our fiscal management and monetary management have been excellent. And that's why I think this rating is just a reflection of that." The rating upgrade is expected to improve India's appeal to global investors, reduce borrowing costs, and further strengthen its macroeconomic position amid global uncertainties. All four agencies consider India to be investment grade, though at the lower end of the scale. S&P's upgrade to BBB is the most notable recent change and signals increased confidence in India's fiscal and economic management. Moody's and Fitch continue with stable outlooks, reflecting both strengths (growth, resilience) and challenges (high debt levels, fiscal constraints). The Indian government has been critical of sovereign credit ratings methodology, as the Economic Survey of 2020-21 highlighted that it should be made more transparent, less subjective and better attuned to reflect economies' fundamentals. Recently, in a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said the Government has made sustained efforts to strengthen India's overall economic outlook, thereby positively impacting its credit profile. These include maintaining sound macroeconomic fundamentals, such as steady growth, price stability, fiscal consolidation, a resilient external sector, robust foreign exchange reserves, a strong banking sector and enhancing physical and digital infrastructure to support investment.
Times of Oman
4 days ago
- Business
- Times of Oman
S&P Global upgrades India's sovereign rating to 'BBB' on strong growth, fiscal reforms
New Delhi: In a significant boost to investor confidence, S&P Global Ratings has upgraded India's long-term unsolicited sovereign credit rating to 'BBB' from 'BBB-', while also raising the short-term rating to 'A-2' from 'A-3'. The outlook on the long-term rating remains stable, reflecting optimism around India's policy continuity, robust economic growth, and improved fiscal management. Alongside the rating upgrade, S&P also revised its transfer and convertibility assessment for India to 'A-' from 'BBB+', citing an improved monetary and external environment. According to S&P, the stable outlook suggests confidence in India's ability to sustain its growth trajectory, driven by high levels of infrastructure investment and a disciplined policy environment. The rating agency noted that the government's efforts in fiscal consolidation, along with targeted spending, are helping reduce the weight of elevated debt and interest burdens over time. However, the agency warned that any backsliding on fiscal discipline or a material slowdown in structural economic growth could exert downward pressure on the ratings. Conversely, a further upgrade may be possible if India significantly narrows its fiscal deficit, bringing net general government debt additions below 6 per cent of GDP on a sustainable basis. India's economic momentum was central to the upgrade decision. Real GDP growth averaged 8.8 per cent between fiscal years 2022 and 2024 -- the highest in the Asia-Pacific region -- and S&P expects this strength to continue, projecting average growth of 6.8 per cent annually over the next three years. This strong growth, despite ongoing fiscal deficits, is helping to moderate the debt-to-GDP ratio. The agency said India's reliance on domestic consumption, which drives around 60 per cent of GDP growth, offers resilience against external shocks, including recent U.S. tariffs and changes in energy import sources. India's fiscal position, historically a weak point in its ratings profile, is showing signs of improvement. S&P noted a gradual consolidation path, projecting the general government deficit to shrink from 7.3 per cent of GDP in fiscal 2026 to 6.6 per cent by fiscal 2029. A key driver behind this fiscal improvement is a shift in government spending priorities. Over the past five to six years, budget allocations have increasingly favored capital expenditure. The Union Government's capex is set to reach INR 11.2 trillion -- about 3.1 per cent of GDP in fiscal 2026, up from 2 per cent a decade ago. Including spending by state governments, total public infrastructure investment now stands at about 5.5 per cent of GDP, putting India on par with or ahead of global peers. On the monetary policy front, reforms such as the shift to inflation targeting have paid off. Inflation expectations are better anchored, and consumer price inflation has averaged 5.5 per cent over the past three years -- well within the RBI's target range of 2 per cent-6 per cent. Recent data shows inflation hovering near the lower end of this band, despite global volatility in energy markets. S&P emphasized that India's rating is underpinned by a vibrant economy, a strong external balance sheet, and democratic institutions that contribute to policy stability and predictability. However, the country still faces structural challenges, particularly a high government debt burden, persistent fiscal deficits, and relatively low per capita income, which continue to weigh on its overall credit profile.
Arab News
24-07-2025
- Business
- Arab News
S&P Global lifts Pakistan's credit rating ‘B-' from ‘CCC+', outlook stable
LONDON: S&P Global raised Pakistan's sovereign credit rating to 'B-' from 'CCC+' and placed it on a 'stable' outlook on Thursday, saying the country's finances and reserves had been stabilized by International Monetary Fund support. 'The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilize fiscal and debt metrics,' S&P said in a statement on the move. 'We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months.'
Reuters
24-07-2025
- Business
- Reuters
S&P Global lifts Pakistan's credit rating 'B-' from 'CCC+', outlook stable
LONDON, July 24 (Reuters) - S&P Global raised Pakistan's sovereign credit rating to 'B-' from 'CCC+' and placed it on a 'stable' outlook on Thursday, saying the country's finances and reserves had been stabilised by International Monetary Fund support. "The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilize fiscal and debt metrics," S&P said in a statement on the move. "We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months."
Arabian Business
25-06-2025
- Business
- Arabian Business
UAE earns top sovereign credit ratings from Moody's, S&P, and Fitch in 2025
The UAE has secured strong sovereign credit ratings from the world's top three agencies – S&P Global (S&P), Moody's Investors Service (Moody's), and Fitch Ratings (Fitch) – reinforcing international confidence in its economy and fiscal resilience. On June 17, S&P assigned the UAE a sovereign credit rating of 'AA' with a stable outlook. Moody's affirmed its 'Aa2' rating, also with a stable outlook, in its 2025 annual review. Fitch followed on June 24 with an 'AA-' rating, maintaining the stable outlook. These consistent evaluations from all three major global credit agencies reflect the UAE's strong fiscal position, economic diversification efforts, and disciplined financial governance. UAE credit ratings The country now joins a small group of nations worldwide with favourable sovereign credit ratings from all three agencies. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said: 'The affirmation of the UAE's strong sovereign rating by the world's top three international credit rating agencies, and their consensus on a stable outlook, reflects the deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies. 'This is the result of a comprehensive economic vision led by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, and closely followed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai.' Sheikh Mohammed said the UAE continues to implement economic policies grounded in diversification, transparency, and fiscal discipline, with a strong focus on increasing non-oil revenues and achieving financial sustainability. This reflects the integrated performance of government entities and long-term strategic planning, which continue to reinforce the UAE's position as a flexible and credible global economic hub. He added: 'At the Ministry of Finance, we remain committed to working closely with all government entities to enhance the efficiency of resource management, develop productive sectors, and improve the country's investment appeal. 'The development of the sovereign yield curve for the dirham was a major milestone in enhancing market transparency, providing investors with a reliable benchmark for pricing dirham-denominated debt instruments. 'This strengthens the UAE's presence on the global economic map and reinforces its ability to confidently navigate regional and international changes and challenges — by expanding the investor base and enhancing the country's reputation as a reliable and attractive destination in global capital markets.' The individual reports from each agency highlight key strengths: S&P: Cited the UAE's robust financial position and the strength of consolidated sovereign assets. It also noted that regional geopolitical tensions are likely to have limited impact due to the country's internal stability and sovereign wealth. Moody's: Emphasised continued progress in non-oil revenue development and the UAE's attractiveness to foreign investors and talent, underpinned by sound policy frameworks. Fitch: Recognised elevated regional risks but affirmed the UAE's capacity to absorb shocks, supported by strong fiscal and external reserves. The ratings confirm the United Arab Emirates' ability to diversify revenue streams beyond hydrocarbons, maintain fiscal discipline, and manage risks effectively. These achievements have contributed to macroeconomic stability and sustainable growth across key sectors such as finance, trade, infrastructure, and innovation.
