New Delhi [India], S&P Global Ratings on Wednesday revised its rating outlook for India to positive from stable, and said it expects continuity in economy reforms and fiscal policies regardless of the Lok Sabha election outcome. But our positive outlook is based on this." Its strong economic growth has led to improved quality of government spending and political commitment to fiscal consolidation, the ratings agency said in a statement. We believe these factors are benefiting credit metrics. The rating agency said India's strong economic expansion is being constructive. Impact on its credit metrics.It expects strong economic fundamentals to strengthen growth momentum over the next two to three years.
"The structure of government expenditure has been changed, with the share in infrastructure increasing," it said, adding that this would reduce bottlenecks and take the country on a higher growth path. The quality of government spending has improved in the last four to five years. As the PM Modi-led administration has increasingly shifted budget allocations to infrastructure spending, for 2024-25, the government is set to spend Rs 1 trillion, or about 3.4 per cent of GDP, on capital expenditure . This is about 4.5 times that of a decade ago, confirming the positive outlook, it said, adding that continued policy stability, deepening of economic reforms and high infrastructure investment will sustain long-term growth prospects.However, in contrast, the elevated fiscal deficit, a large debt stock and interest burden remain, but with the government prioritizing ongoing consolidation efforts, it is noted that if India's fiscal deficit is to be meaningfully reduced If this happens then the rating may increase so that there can be a net change in the general government. S&P Global Ratings said that while debt on a structural basis has come down to below 7 per cent of GDP, if India can reduce the fiscal deficit substantially, the rating support will strengthen over time. “We may also raise the rating if we see sustained and substantial reforms at the central bank.” The effectiveness and credibility of monetary policy is such that inflation is managed at a fairly low rate over time,” the rating agency said. Retail inflation stood at 4.83 per cent in April 2024, the lowest in the last 1 months. Retail inflation in India, however, is at the RBI's comfort level of 2-6 per cent, but above the ideal 4 per cent scenario.Inflation has been a matter of concern for many countries, including advanced economies, but India has managed to control its inflation trajectory to a large extent. OK, said th rating agency. On the downside, if it sees a lack of political commitment to maintain sustainable public finances, it could revise the outlook to stable. The Indian economy has made a remarkable comeback from the COVID-19 pandemic, with S&P estimating real GDP growth over the past three years. The annual average is 8.1 percent, which is the highest in the Asia-Pacific region.“We expect these growth dynamics to continue over the medium term and GDP to grow at around 7.0 per cent annually over the next three years. The overall size of the Indian economy is now estimated to be 1.5 per cent larger than pre-Covid (Rs. India's GDP will grow by 46% during the October-December quarter, and the country continues to be the third fastest growing economy. The economy is expected to grow at 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.Fourth quarter data is expected later this week. India's economy is expected to grow at 7.2 percent in 2022-23 and 8.7 percent in 2021. -22 Respectively, India's GDP size currently ranks 5th after the US, China, Germany and Japan. It overtook the UK in 2022. Just a decade ago, Indian GDP was the eleventh largest in the world.India's GDP is currently estimated to be around US$3.7 trillion. Citing various macroeconomic parameters which are performing quite well, Amitabh Kant, India's G2 Sherpa and former CEO of NITI Aayog, estimated that the country is the world's India is set to overtake Japan as the fourth largest economy in the world. By 2025.
"The structure of government expenditure has been changed, with the share in infrastructure increasing," it said, adding that this would reduce bottlenecks and take the country on a higher growth path. The quality of government spending has improved in the last four to five years. As the PM Modi-led administration has increasingly shifted budget allocations to infrastructure spending, for 2024-25, the government is set to spend Rs 1 trillion, or about 3.4 per cent of GDP, on capital expenditure . This is about 4.5 times that of a decade ago, confirming the positive outlook, it said, adding that continued policy stability, deepening of economic reforms and high infrastructure investment will sustain long-term growth prospects.However, in contrast, the elevated fiscal deficit, a large debt stock and interest burden remain, but with the government prioritizing ongoing consolidation efforts, it is noted that if India's fiscal deficit is to be meaningfully reduced If this happens then the rating may increase so that there can be a net change in the general government. S&P Global Ratings said that while debt on a structural basis has come down to below 7 per cent of GDP, if India can reduce the fiscal deficit substantially, the rating support will strengthen over time. “We may also raise the rating if we see sustained and substantial reforms at the central bank.” The effectiveness and credibility of monetary policy is such that inflation is managed at a fairly low rate over time,” the rating agency said. Retail inflation stood at 4.83 per cent in April 2024, the lowest in the last 1 months. Retail inflation in India, however, is at the RBI's comfort level of 2-6 per cent, but above the ideal 4 per cent scenario.Inflation has been a matter of concern for many countries, including advanced economies, but India has managed to control its inflation trajectory to a large extent. OK, said th rating agency. On the downside, if it sees a lack of political commitment to maintain sustainable public finances, it could revise the outlook to stable. The Indian economy has made a remarkable comeback from the COVID-19 pandemic, with S&P estimating real GDP growth over the past three years. The annual average is 8.1 percent, which is the highest in the Asia-Pacific region.“We expect these growth dynamics to continue over the medium term and GDP to grow at around 7.0 per cent annually over the next three years. The overall size of the Indian economy is now estimated to be 1.5 per cent larger than pre-Covid (Rs. India's GDP will grow by 46% during the October-December quarter, and the country continues to be the third fastest growing economy. The economy is expected to grow at 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.Fourth quarter data is expected later this week. India's economy is expected to grow at 7.2 percent in 2022-23 and 8.7 percent in 2021. -22 Respectively, India's GDP size currently ranks 5th after the US, China, Germany and Japan. It overtook the UK in 2022. Just a decade ago, Indian GDP was the eleventh largest in the world.India's GDP is currently estimated to be around US$3.7 trillion. Citing various macroeconomic parameters which are performing quite well, Amitabh Kant, India's G2 Sherpa and former CEO of NITI Aayog, estimated that the country is the world's India is set to overtake Japan as the fourth largest economy in the world. By 2025.
