NEW DELHI: Fitch Ratings has retained India’s sovereign rating at ‘BBB-’ with a stable outlook. While affirming India’s rating, the agency said that India’s robust medium-term GDP growth outlook and sound external finances remain intact. It also acknowledged that the country has effectively navigated a fraught external environment in the past few years.
However, Fitch Ratings did point out that India’s weak public finances - illustrated by high deficits, debt and interest/revenue ratio compared with peers - continue to be the largest constraint for the rating.
Fitch in its rating rationale said that India is poised to remain one of the fastest-growing countries globally in the next few years as the robust economic momentum is proving resilient.
It has forecast GDP growth of 6.9% in FY24, which is lower than the government’s growth estimate of 7.3%. Fitch had earlier projected India to grow at 6% in the current financial year. It expects India to grow at 6.5% in FY25.
“Investment is likely to remain a key growth driver, as the government’s capex drive is likely to continue and private investment should accelerate gradually. Consumption is likely to moderate further in the near term due to reduced household savings buffers,” said Fitch Ratings in its latest ratings review.