New Delhi: Fitch Ratings on Tuesday affirmed India's sovereign rating at 'BBB-' with a stable outlook on robust medium-term growth prospects and sound external finances.
India's rating has remained unchanged at 'BBB-', the lowest investment grade, since August 2006.
"Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook," the global rating agency said in a statement.
In its sovereign rating action, Fitch said 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.
The agency has projected India's GDP growth at 6.9 per cent for the fiscal year ending March 2024 (FY24) before easing to 6.5 per cent in FY25.
Investment is likely to remain a key growth driver, as the government's capex drive is expected to continue, and private investment should accelerate gradually. Consumption is also likely to moderate further in the near term due to reduced household savings buffers, Fitch said.
India's rating is underpinned by a robust medium-term GDP growth outlook and sound external finances, which remain intact as the country has effectively navigated a fraught external environment in the past few years, Fitch said.
However, weak public finances - illustrated by high deficits, debt and interest/ revenue ratio compared with peers - continue to be the largest constraint for the rating.
Lagging structural metrics, including World Bank governance indicators and GDP per capita, also weigh on the rating, it added.
Published 17 January 2024, 02:07 IST