Standard and Poor's has said there is no immediate threat to India's sovereign debt rating of BBB, though loose fiscal policy and the government's inability to carry forward economic reforms could have implications in the medium-term.
“We do not see an immediate impact on India's sovereign rating (BBB—/Stable) resulting from the lowering of the U.S. sovereign rating to AA+,” Standard & Poor's sovereign analyst Takahira Ogawa told PTI.
S&P recently lowered the sovereign rating of the U.S. to AA+ from AAA. The ratings are opinions that reflect the ability and willingness of the rated entity to meet financial obligations.
The decision to lower the sovereign rating of the U.S. had deleterious consequences for stock markets all over the world, including India.
Referring to problems with regard to high inflation and the fiscal deficit in India, Mr. Ogawa said,
“Potential longer-term consequences may point to negative factors.”
