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Fitch Ratings on Tuesday affirmed India’s long-term foreign currency issuer default rating at “BBB-“, saying that the world’s fastest-growing economy has a stable outlook, reported CNBC.
The global rating agency said India’s rating reflects strengths from a robust growth outlook compared to peers and still-resilient external finances.
It said India’s robust medium-term growth outlook is a key supporting factor for rating. The financial sector risks continue to ease on, the agency said, adding that the asset quality pressures are likely to remain “well-contained” even as regulatory forbearance unwinds, supporting India’s financial sector’s performance.
Fitch said India’s general government deficit is forecast to remain large compared to peers. And it expects India’s general government deficit to fall slightly to 9.6 per cent of GDP in FY23 from 9.8% in FY22.
“India is somewhat insulated from the gloomy global outlook in 2023, given its modest reliance on external demand,” Fitch said, adding, “We expect declining exports, heightened uncertainty, and higher interest rates to slow growth to 6.2 per cent in FY24.”
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