S&P says India’s strong growth, external balance sheet to neutralise global risks

Global ratings agency S&P has said that India’s strong growth and external balance sheet are expected to neutralise the impact of a tough global environment.

“We expect these strengths to help neutralize the risks inherent in the treacherous global environment”, the ratings major said in a ‘Frequently Asked Questions’ on factors that may impact credit rating.

However, S&P also added that the global risks could affect the country’s sovereign credit metrics.

S&P, which has accorded an investment grade rating of ‘BBB-‘ on India with a stable outlook, warned that a more severe global environment could put some downward pressure on sovereign credit ratings.

Driven by external turbulence, India’s foreign exchange reserves have been falling while the current account deficit is rising, S&P said, adding that inflation is also increasing amid tightening financial conditions both at home and globally.

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