Fitch Ratings on Friday said it has downgraded India’s sovereign rating outlook to stable from negative after two years, as the risk of a slowdown in growth in the medium-term on the back of a faster economic recovery remains low. It is done.
Fitch Ratings has retained India’s sovereign rating at ‘BBB-‘.
“The revision in the outlook reflects our view that the economic recovery in India and easing financial sector vulnerabilities in India should reduce the risk of growth deceleration in the medium term, despite the sharp shocks in global commodity prices,” the rating agency said. However ,
Fitch Ratings has lowered its economic growth forecast for the current fiscal to 7.8 per cent, which was earlier expected to be 8.5 per cent. The cut was made due to rising inflation due to a rise in global commodity prices.
Fitch said, “India’s economy is showing a solid recovery from the shock of the Kovid-19 epidemic.
” An increase of 7.2 percent is expected.
Fitch stressed that India’s medium-term growth prospects remain solid.
Fitch said India’s strong growth outlook vis–vis peers is a major contributory factor to the ratings.
The rating agency said, “We anticipate a growth of around seven per cent between FY 2023-24 and FY 2026-27. This is driven by strengthening the government’s infrastructure, advancing the reform agenda and easing pressure in the financial sector. Nevertheless, given the uneven nature of economic recovery and implementation, there are challenges to this forecast.
The agency changed India’s outlook from ‘stable’ to ‘negative’ in June 2020. Then Fitch had said that the Kovid-19 pandemic has weakened India’s growth outlook.
India’s rating has been consistently “BBB-” since August 2006, but the outlook has been varying from stable to negative.