Robust growth supports credit profile
Citing weak fiscal scenario, global rating agency Fitch has retained India’s sovereign rating at ‘BBB-‘, the lowest investment grade, with stable outlook.
This is the 13th year in a row that Fitch has rated India at ‘BBB-‘, which was upgraded from ‘BB+’ on 1 August 2006.
“India’s ratings balance a strong medium-term growth outlook and relative external resilience stemming from strong foreign reserve buffers, against high public debt, a weak financial sector and some lagging structural factors,” Fitch said in a statement on 4 April 2019.
But a robust growth outlook continues to support India’s credit profile.
Fitch expects 6.8% in the current fiscal and 7.1% in the next, supported by accommodative monetary policy, easing of bank regulations, and government spending.
“A weak fiscal position continues to constrain India’s sovereign ratings. In this regard, the next government’s medium-term fiscal policy will be of particular importance from a rating perspective,” Fitch said. fiinews.com