Fitch affirms India’s rating at ‘BBB-‘, outlook stable

“India’s ratings reflect its strengths, including its strong growth prospects relative to its peers and its strong external finances, which have helped India weather the major external shocks of the past year,” the rating agency said. rice field.

A ‘BBB’ rating indicates that default risk expectations are currently low. Although our ability to pay our financial commitments is believed to be adequate, adverse business or economic conditions are likely to impair this ability. The ratings agency sees the private sector poised for stronger investment growth following improvements in corporate and bank balance sheets over the past few years, aided by government infrastructure pushes. said India’s growth prospects brightened.

According to the report, India will be one of the fastest growing Fitch-rated global sovereigns at 6 percent in 2024, supported by strong investment prospects.

“Nevertheless, headwinds from the highlands inflationGrowth will slow from the 7% forecast for FY23 to recover to 6.7% by FY25, due to high interest rates and weak global demand, as well as a pandemic-induced decline in pent-up demand,” officials said. It pointed out.

Sustained improvements in asset quality and profitability have helped strengthen banks’ balance sheets on the back of economic recovery, creating room to absorb risks as pandemic-related patience measures continue to be lifted in FY24, report says said.

The agency expects headline inflation to fall, but stay near the high end of the Reserve Bank of India’s 2-6% target range, with average inflation in FY2024 expected to be 5.8%, down from 6.7% last year. are doing. The RBI forecasts CPI inflation of 5.2% for FY24.

Fitch said core inflation pressures appeared to be easing, falling to 5.7% in March, the lowest since July 2021. He expects the general government deficit (excluding divestments) to shrink from 9.2% of GDP to a still high 8.8% in FY2024. % in FY2023.

Ratings agencies downgraded forecasts for FY2023 current account deficit The GDP ratio will be raised to 2.3% from 3.3% at the December review. For fiscal 2024, the current account deficit is expected to reach 1.9%.