Global rating agency Standard and Poor’s (S&P) in its latest report expects a stable trend in sovereign credit rating in Asia-Pacific nations, including India, despite growing economic uncertainties. The rating agency for its view of stable sovereign credit rating has given the reason of continuing US recovery, lower energy prices and still-plentiful liquidity in financial markets
In its mid-year review of the Asia-Pacific region, S&P retained India’s sovereign rating at ‘BBB-' with stable outlook as originally mentioned in its report in September 2014. It had projected India’s credit outlook as stable for the next 24 months, saying 'the new government has both willingness and capacity to implement reforms necessary to restore some of India's lost growth potential, consolidate its fiscal accounts, and permit the Reserve Bank of India to carry out effective monetary policy'. S&P has said that rating could be raised if the economy reverts to a real per capita GDP trend growth of 5.5 per cent per year, and fiscal, external, or inflation metrics improve, while it warned that the rating could be lowered if the government’s structural reform agenda stalls such that economic growth does not accelerate, or fiscal and debt ratios fail to improve'.
According to a new report by the S&P, overall, 'global sovereign creditworthiness has declined slightly since the onset of the global financial crisis in 2008.' 'The average long-term sovereign credit rating has fallen by just over one notch to between 'BBB-' and 'BBB', compared with just below 'BBB+' in 2008.' Referring further to the developments in China, it said the continuing slowdown and its struggle with asset deflation, and euro zone uncertainties weigh on Asia-Pacific's growth prospects.
