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Yann Le Pallec, President of S&P Global Ratings, said that despite global shocks and trade disruptions, India will remain among the world’s most resilient and fastest growing economies. He said that India’s economy will grow by about 6.5% this year and this growth can reach 7% in the next two years.
According to the Economic Times report, Yann Le Pallec said that India’s large economy based on domestic consumption protects it from global trade shocks. India’s exports to the US are only 2% of GDP, so external influences remain limited. He said that the recent upgrade of India’s sovereign rating to BBB by S&P reflects the country’s policy stability, economic strength and continued investment in infrastructure.
India can become a developed country by 2047
Yann Le Pallec said that although geopolitical tensions remain a global risk, for India these are manageable factors and not major threats. According to him, in the current situation, global investors consider India as one of the most attractive investment destinations for stable and long-term growth.
Palec also said that in the coming times, India will have to focus on increasing labor participation, improving social inclusion and expanding private-government capital investment. With these steps, India can achieve its goal of becoming a developed country by 2047.
India’s balance sheet strong
He said that the Reserve Bank of India (RBI) can cut interest rates by 25 basis points by the end of the year, which will further accelerate capital inflow. However, if rate cuts in the US happen rapidly then India’s relative attractiveness may decrease slightly. The S&P chief said that there has been a record increase in global debt, but India’s situation is comparatively better because the balance sheets of banks and companies here have strengthened after the pandemic.
He also said that India’s inclusion in the global bond index will further increase the confidence of foreign investors. Also, domestic rating agencies like CRISIL are playing an important role in increasing transparency. Finally, Palek said that areas like AI and private credit are reshaping India’s financial system. But with this change, it will also be necessary to strengthen transparency and regulation so that this development can be safe and sustainable.