S & P reaffirms India's sovereign credit rating at BBB minus with stable outlook

Rating agency Standard & Poor's has reaffirmed India's sovereign credit rating at BBB minus with stable outlook and expects its economy to grow strongly over the next two years.

"India's economy continues to achieve impressive long-term growth rates despite a recent deceleration. It is believed that the economic slowdown is cyclical rather than structural," said a statement issued by the Ministry of Finance citing a summary publication from the rating agency.

"They expect the economy to continue to outperform its peers on the back of rising domestic demand and strong demographics," said the statement.

"They have maintained a stable outlook on the basis of their expectation that over the next two years, the growth will remain strong and India will maintain its sound net external position and fiscal deficit will remain elevated but broadly in line with their forecast," it added.

S & P's rating action follows Moody's Investors Service's recent lowering of India's rating outlook to negative from stable.

The moves come when economic growth rate has slowed to 4.5 per cent in the July to September quarter from 5 per cent in the April to June quarter on account, largely due to contraction in the manufacturing sector.

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