American rating agency Fitch has upgraded the outlook for India’s economy. Fitch Ratings on Friday said it has downgraded India’s sovereign rating outlook to stable from negative, as the risk of a slowdown in growth in the medium-term due to a rapid economic recovery has eased.
Fitch Ratings has retained India’s sovereign rating at ‘BBB-‘. The rating agency said, “The revision in the outlook reflects our view that the slowdown in growth over the medium term is due to economic recovery in India and easing financial sector vulnerabilities, despite the shocks in global commodity prices.” The risk is reduced.”
However, Fitch Ratings has cut its growth forecast for the current fiscal to 7.8 per cent, from 8.5 per cent earlier. The cut was made due to rising inflation due to a rise in global commodity prices. Even before this, many big rating agencies of the world have reduced India’s growth forecast.
Earlier, the World Bank has reduced India’s economic growth rate to 1.2 percent. The World Bank had said that India’s growth rate can be up to 7.5 percent in the current financial year. Whereas in earlier estimates, the World Bank had projected India’s growth rate to be 8.7 percent. The World Bank Global Economic Prospects in the latest report said, “India is projected to slow down to 7.5 per cent growth in fiscal year 2022-23. These changes are in view of rising inflation, supply chain stagnation, reduced consumption of services from the pandemic and geopolitical tensions. The World Bank said that “growth will also be fueled by investments by the private sector and government, which have introduced several reforms to improve the business environment.”
In May, S&P Global Ratings cut its GDP growth forecast for the fiscal year 2022-23 to 7.3 per cent from 7.8 per cent. At the same time, the IMF has also reduced the growth forecast from 9 percent to 8.2 percent.