NEW DELHI, Sept. 25 (Xinhua) -- The S&P Global Ratings on Friday affirmed its "BBB-" long-term and "A-3" short-term unsolicited foreign and local currency sovereign ratings on India, saying the outlook on the long-term rating remains stable.
"India's economy will experience a record contraction in fiscal 2021, largely owing to the global COVID-19 pandemic. We expect real GDP growth to recover from fiscal 2021 onwards," local media quoted S&P Global as saying in a statement.
The "BBB-" rating is the lowest investment-grade rating on the agency's scale that hints the entity has adequate capacity to meet financial commitments but has certain risks aligned with the economic condition.
The rating agency said India's weak fiscal setting will worsen this year, constraining the government's ability to aid the economy.
"At the same time, the country's external settings have improved, helped by the central bank's rapid accumulation of foreign exchange reserves," it said.
The ongoing COVID-19 pandemic has wreaked havoc on the Indian economy which witnessed one of the toughest lockdowns across the globe.
"We believe the pandemic has exacerbated India's key credit weaknesses: its historically high general government deficits and elevated debt stock," S&P Global said.
The rating agency said the government's "ability to deliver and execute additional economic reforms, especially those that spur investment and job creation, will be important for India's ability to recover from the economic slowdown." Enditem
