India’s high growth enough to keep credit rating stable: S&P Global

Friday, 14 December 2018 00:00 - - {{hitsCtrl.values.hits}}

London (Reuters): India’s rapid economic growth will be enough to offset worries about the independence of its central bank and keep its credit rating in the coveted investment grade bracket, S&P Global said on Wednesday.

India’s BBB- rating puts it on the bottom rung of the investment grade ladder, and sentiment towards the country was hit on Monday when central bank governor Urjit Patel resigned following a months-long tussle over policy with the government.

“We always like to see a central bank that is independent because if you don’t, it can have very negative consequences on your capacity to contain inflation and foster growth,” S&P’s lead global sovereign analyst Roberto Sifon-Arevalo told Reuters. “But when you are growing at 7%, that environment is quite forgiving, because it allows for a lot of these unorthodox things to happen without having a tremendous amount of damage.” There are other pressures mounting too though.Prime Minister Narendra Modi’s support has taken a hit ahead of national elections next year, volatile crude prices are tough for a country that imports over 90% of its oil, and there is general pressure on emerging markets amid a rumbling global trade war.

“At the moment that (the high growth) is enough (to keep the rating stable),” Sifon-Arevalo added. “If the economy was growing at 2% it would be a lot more complicated.”

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.