S&P Highlights Credit Risks Amid India-Pakistan Hostilities

S&P Global Ratings warns that the ongoing hostilities between India and Pakistan increase credit risks for both nations. The agency expects heightened tensions over weeks, potentially impacting sovereign credit metrics. However, it anticipates the conflict to subside without substantial lasting effects on credit ratings.

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.