Fitch Global Agency Marks India with BBB for Long-Term Foreign Currency Issuer Default Rating
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On Tuesday, Fitch Ratings said that India’s sovereign rating shows a balanced outlook for the nation. It has thus, fixed the nation at BBB rating for Long Term Foreign Currency Issuer Default Rating. The agency stated that India has the potential for strong growth and that is its primary supporting factor, which resulted in the rating currently. It also conveyed that the rating for India reflects the prospect of a robust growth outlook and strengths in comparison to resilient external finances and peers.
These have helped the nation to navigate over the last year, the large external shocks. But India is also weak on the front of public finances. This is because of debt relative to peers, high deficits, and lagging structural indicators. And when we talk about indications, it includes that from the GDP per capita and World Bank governance. The agency has provided credit rating BBB to India. While the nation is perking its efforts to garner investments, a few setbacks have come along the way.
But since August 2006, this is the lowest grade rating for investment. Globally, Fitch Ratings has marked India as one of the fastest-growing sovereigns. This means that the nation though running low on credit rating still has chances to make a comeback and recover from the losses. The growth rate is said to be at 6% in the present fiscal year. The period ending is considered as March 2024. The rating is also supported by prospects of strong and stable investments.
The global rating agency also said that because of high-interest rates, rising inflation, reduced demand worldwide, and pent-up demand because of the fading pandemic, the growth will slow down from the estimate of 7% for FY23. And then by FY25, the same will rebound to 6.7%. But things may look in turn positive for India soon as the country recuperates from the financial low.
