S&P Global Ratings on Tuesday kept India’s sovereign rating unchanged at the lowest investment grade of ‘BBB-’ for the 14th year in a row and said the government’s ability to execute additional economic reforms that spur investment and create jobs will be crucial for recovery from the current economic slowdown.

S&P projected a 9.5 per cent GDP growth in the current fiscal year that began in April and a 7.8 per cent expansion in the following year.

GDP, which shrank from $2.87 trillion in 2019-20 to $2.66 trillion in the following year, is projected to expand to $3.96 trillion in 2024-25.

Prime Minister Narendra Modi in 2019 envisioned making India a $5 trillion economy and a global economic powerhouse by 2024-25.

Forecasting economic recovery to gain pace through the second half of 2021-22 fiscal, S&P kept the rating outlook at stable.

“The government’s ability to deliver and execute additional economic reforms, especially those that spur investment and job creation, will be important for India’s ability to recover from the economic slowdown.

“Existing vulnerabilities, including a relatively weak financial sector, rigid labour markets, and sluggish private investment, could hamper the economic recovery if not meaningfully addressed,” S&P said .

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