S&P Global Ratings on Thursday affirmed India’s sovereign rating at ‘BBB-’ with a stable outlook, saying the strengths lie in a fast-growing economy and strong external balance sheet but flagged weak fiscal performance and low GDP per capita.

It said the Indian economy is set for real GDP growth of about 6 per cent in 2023, which compares favourably with emerging market peers amid a broad global slowdown.

Investment and consumer momentum will underpin solid growth prospects over the next three-four years.

“S&P Global Ratings affirmed its ‘BBB-’ long-term and ‘A-3’ short-term unsolicited foreign and local currency sovereign credit ratings on India.

The outlook on the long-term rating is stable,” the US-based agency said in a statement.

‘BBB-’ is the lowest investment grade rating.

The stable outlook on the long-term rating reflects S&P’s view that India’s strong economy and healthy revenue growth will support its weak fiscal settings.

“The sovereign credit ratings on India are anchored by the country’s dynamic, fast-growing economy, strong external balance sheet and democratic institutions supporting policy predictability and compromise.

“These strengths are counterbalanced by the government’s weak fiscal performance and burdensome debt stock, as well as the economy’s low GDP per capita,” S&P said.

S&P is the second global rating agency after Fitch to affirm India’s sovereign rating and stable outlook in 2023.

Fitch also had last week affirmed India’s rating at ‘BBB-’ with a stable outlook, citing robust growth and resilient external finances.

All the three global rating agencies — Fitch, S&P Global and Moody’s — have the lowest investment grade rating on India with a stable outlook.