Sovereign bonds slid after the report, with the yield on the benchmark 10-year note rising 5 basis points to 6.76 per cent.
India
may have its debt downgraded in the event of a major economic
slowdown, S&P Global Ratings said.
Sovereign
bonds slid after the report, with the yield on the benchmark 10-year
note rising 5 basis points to 6.76 per cent.
The
rating company said it expects the economy to gradually recover over
the next few years with correspondingly higher growth.
”If
this recovery does not materialize, and it becomes clear that India’s
structural growth has significantly deteriorated, we could lower the
rating,” Andrew Wood, a Singapore-based analyst at S&P,
said in the statement.
Economic
growth is at the lowest since Prime Minister Narendra Modi came to
power for the first time in 2014. The economy expanded 4.5 per cent
in July-September, slowing for a sixth straight quarter as fall in
local consumption, troubled banks and a weak global outlook took
their toll.
S&P
rates India at BBB-, which is the lowest investment-grade rating.
Moody’s Investors Service downgraded India’s outlook to negative
from stable in November though it rates the country a notch higher
than S&P.
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