India is seeking to upgrade its sovereign credit rating, currently at the lowest possible investment grade, as the Asian nation believes its economic metrics since the pandemic hit, a senior government official said on Monday. Has improved a lot.
The official said the country’s finance ministry met representatives of the top three rating agencies — Fitch Ratings, Moody’s Investors Service and S&P Global Ratings — after the government presented its annual budget on February 1.
“Our pitch is that our economic performance calls for an upgrade,” said the official, requesting anonymity. Discussion is private.
S&P and Fitch have rated India ‘BBB-‘ and Moody’s ‘Baa3’, all indicative of the lowest-potential investment grade, but with a stable outlook. These ratings are used to assess a country’s creditworthiness, which often affects its borrowing costs.
They take into account other parameters such as economic growth rate, inflation, general government debt and short-term external debt as a percentage of GDP, and political stability.
The official said that the Indian government has shared its fiscal consolidation plan with the three agencies, which they have found satisfactory.
The finance ministry, Fitch, Moody’s and S&P Global did not immediately respond to a Reuters request for comment.
India aims to reduce its fiscal deficit to 5.9% of GDP in the next fiscal year from 6.4% target for the current year ending March 31, and further reduce it to 4.5% over the next three years.
The Economic Survey of India has projected a growth of 6% to 6.8% for 2023-24, which would make it one of the fastest growing major economies in the world.