Friday, May 12, 2023

Fitch affirms India's sovereign rating on robust growth outlook

 Delhi, India: Fitch Evaluations on Tuesday insisted India's sovereign rating with a steady viewpoint saying the nation has a strong development standpoint and tough outer funds.

A statement from Fitch Ratings stated, "Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook. Strong growth potential is a key factor supporting the sovereign rating."

Fitch Ratings stated, "India's rating reflects strengths from a robust growth outlook compared to peers and resilient external finances, which have supported India in navigating the large external shocks over the past year." India's rating reflects India's strengths from these two factors.

It added that India's weak public finances, exemplified by high deficits and debt in comparison to peers, as well as lagging structural indicators such as GDP per capita and governance indicators from the World Bank, offset these.

Since August 2006, the agency has maintained India's credit rating of 'BBB-,' which is the lowest investment grade rating.

India is predicted by Fitch Ratings to be one of the rated sovereigns that will grow at the fastest rate in the world, increasing by 6% during the fiscal year that begins in March 2024, thanks to favorable investment prospects.

According to the global rating agency, "Still, headwinds from elevated inflation, high interest rates, and subdued global demand, along with fading pandemic-induced pent-up demand," growth will slow from our FY23 estimate of 7% to 6.7% by FY25.

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