Fitch Ratings on Friday revised its outlook on India’s long-term foreign currency Issuer Default Rating (IDR) to Stable/from Negative citing diminished downside risks to medium-term growth.
The rating agency has also affirmed India’s Issuer Default Rating (IDR) at ‘BBB-‘.
The Outlook revision reflects our view that downside risks to medium-term growth have diminished due to India’s rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock.
We expect robust growth relative to peers to support credit metrics in line with the current rating, Fitch Ratings said in a statement.
High nominal GDP growth has facilitated a near-term reduction in the debt-to-GDP ratio, but public finances remain a credit weakness with the debt ratio broadly stabilising, based on our expectation of persistent large deficits.