August 15, 2025

Hold on, India just scored a big win on the global stage! On Thursday, the prestigious rating agency S&P lifted India’s credit rating from BBB- to BBB, keeping a steady and confident outlook. Why? Because India’s economic growth is shining bright like a diamond! S&P says India’s strong growth is thanks to smart monetary policies that keep inflation in check and the government's serious efforts to manage spending wisely. They noted, “Together with the government's commitment to fiscal consolidation and efforts to improve spending quality, we believe these factors have coalesced to benefit credit metrics.” India made a stunning comeback after the pandemic, growing its real GDP by an impressive average of 8.8% from fiscal 2022 to 2024. That’s the highest growth rate in the entire Asia-Pacific region! The agency sees this momentum continuing with an estimated 6.8% GDP growth every year for the next three years. Despite India's still large fiscal deficit, this growth is helping to keep the government’s debt under control compared to the size of the economy. S&P also says the impact of U.S. tariffs on India will be manageable because India relies more on domestic spending, which makes up about 60% of its economy. What could push India’s rating even higher? S&P points out that if India can lower its fiscal deficit more sharply—so the debt growth slows to below 6% of GDP—and boost public investments in infrastructure, it would be a big plus for the economy and its credit score. In short, India’s economic boom is doing wonders for its financial health, and S&P expects these strong fundamentals to keep India’s growth engine roaring over the next 2-3 years. A great day for India’s economy, indeed!

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Tags: India credit rating, S&p upgrade, Economic growth, Gdp forecast, Fiscal deficit, Monetary policy,