S&P affirms India's "BBB-" rating with stable outlook; weak points flagged

Agency sees major economic recovery in 2021, normalisation by fiscal 2022; also refers to weak fiscal settings, such as elevated govt deficits and indebtedness, low per capita income

Amid sharp economic contraction, rating agency Standard and Poor’s (S&P) today affirmed India’s sovereign long-term rating at “BBB-”, reflecting above-average long-term economic growth, sound external profile, and evolving monetary settings.

However, it also flagged vulnerabilities due to weak fiscal settings, including consistently elevated general government deficits and indebtedness and low per capita income.

The outlook on the long-term rating is stable. The stable outlook reflects view that India's contraction in fiscal 2021 will be followed by a significant recovery, which will stabilize the country's broader credit profile, S&P said in a statement.

It also affirmed 'A-3' short-term unsolicited foreign and