HONG KONG — Standard & Poor’s lowered its outlook for India on Wednesday, citing the country’s struggle to rein in its relatively high debt and fiscal deficit amid a political impasse that is unlikely to ease before the next national elections in 2014.


Although S.&P. did not downgrade India’s debt rating, the revision in the outlook, from stable to negative, signaled that there was now at least a one-in-three chance of a downgrade sometime in the next 24 months, S.&P. said.


The agency rates India’s debt at BBB–, the lowest investment-grade rating. A downgrade would carry heavy significance for investors, who are already intensely nervous about slowing growth and persistent infrastructure shortfalls in India, as well as about the debt troubles of Europe and the lethargic performance of the U.S. economy.


“We expect India’s real G.D.P. per capita growth will likely remain moderately strong, at 5.3 percent in the current fiscal year ending March 31, 2013, compared with about 6 percent on average over the prior five years, but down from 8 percent in the middle of the last decade,” said Takahira Ogawa, a credit analyst at the agency.


A downgrade is probable if the country’s economic growth prospects dim or fiscal reforms slow, Mr. Ogawa said.


On the other hand, he added, the rating could stabilize again if the government implements initiatives to reduce deficits and to improve its investment climate.


Young, populous and increasingly affluent, India has enjoyed many years of rapid growth and is widely seen as one of the most important emerging economies. The fact that it is also less dependent than many other Asian countries on exports has helped it weather the global economic turmoil of recent years relatively well.


Sluggish capital investment, lack of fiscal discipline and poor infrastructure, however, have slowed the growth momentum recently, prompting the central bank last week to cut interest rates more aggressively than many analysts had expected. Although a rate cut could reinvigorate the economy, many analysts cautioned that persistent inflation pressures could constrain the central bank’s ability to make further economy-bolstering moves in the future.


India, unlike most of the rest of emerging Asia, also has sizable fiscal and current-account deficits, which it is struggling to reduce. S.&.P. on Wednesday estimated that the current-account deficit in the fiscal year that ended last March had widened to 3.7 percent, from 2.6 percent the previous year, and that it was likely to remain at about that level during the current fiscal year.


In the annual budget speech last month, Finance Minister Pranab Mukherjee pledged to reduce India’s budget deficit to 5.1 percent of gross domestic product in the current fiscal year, down from an estimated 5.9 percent for the previous year.


But many analysts fear the target is overly optimistic and the budget too tame.


The high fiscal deficit and a heavy debt burden “remain the most significant constraints on the sovereign ratings on India,” S.&.P. said, adding that it expected India to make only “modest progress” in fiscal and public sector reforms, given “the current political gridlock.”




Britain in recession again


Britain’s economy slid into its second recession since the financial crisis, with official data released Wednesday unexpectedly showing a fall in output in the first three months of this year, Reuters reported from London.


The Office for National Statistics said Britain’s gross domestic product had fallen 0.2 percent in the first quarter of 2012 after contracting 0.3 percent at the end of 2011, confounding forecasts for 0.1 percent growth and piling pressure on Prime Minister David Cameron’s embattled coalition government.


Optimistic forecasts were upset by the biggest fall in construction output in three years, coupled with anemic growth in the service sector and a fall in industrial output.