S&P Highlights Credit Risks Amid India-Pakistan Hostilities

S&P Global Ratings has sounded alarms over the heightened regional credit risks resulting from the current hostilities between India and Pakistan. The agency cautioned that any escalation of the conflict could exert downward pressure on the sovereign credit support of both nations.

The credit rating firm, maintaining India's rating at 'BBB-' with a positive outlook and Pakistan's at 'CCC+' with a stable outlook, does not foresee immediate impacts on their credit ratings but expects tensions to remain high for several weeks, allowing for significant military actions from both sides.

S&P underscores the potential for serious miscalculations, warning that prolonged hostilities would detrimentally affect fiscal stability in both countries and deter foreign investment in India, while exacerbating Pakistan's external fiscal challenges.

(With inputs from agencies.)