BackFitch affirms India at 'BBB-'; outlook negative
India's rapid economic recovery from Covid pandemic, easing financial sector pressures are narrowing risks to medium-term growth outlook, Fitch said
PremiumRatings agency Fitch today said it has affirmed India's long-term foreign foreign-currency issuer default rating at 'BBB-' with the outlook being negative.
India's rapid economic recovery from Covid pandemic, easing financial sector pressures are narrowing risks to medium-term growth outlook, Fitch said.
Fitch projected a GDP growth of 8.7% in the current financial year ending March 2022 (FY22) and 10% in FY23 for India.
"India's rating balances still-strong medium-term growth outlook, external resilience from solid foreign reserve buffers, against high public debt and weak financial sector," Fitch said.
India's negative outlook on rating reflects lingering uncertainty around medium-term debt trajectory, the ratings agency noted.
Fitch, on India, said potential remains for a resurgence in coronavirus cases, but anticipated economic impact of further covid-19 outbreaks would be less pronounced than previous surges.
India's strong medium-term growth outlook relative to peers is a key supporting factor for rating, Fitch said, adding that fiscal metrics are showing signs of improvement and forecast India's general government deficit to narrow to 10.6% of GDP in FY22.
Strong revenue growth, particularly from goods and services tax collections, is facilitating india's government to stay within budget parameters, according to it.
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