Fitch retains India rating at 'BBB-' with stable outlook; says country's medium-term growth potential is strong

New Delhi: Global credit rating agency Fitch on Friday affirmed India’s sovereign rating at ‘BBB-’ with ‘stable’ outlook, saying that the country’s medium-term growth potential is strong. ‘BBB-’ rating indicates lowest investment grade. “India’s rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment,” Fitch said. [caption id=“attachment_4242639” align=“alignleft” width=“380”] Representational image. Reuters[/caption] It projected India’s growth at 7.3 percent in current the fiscal and further to 7.5 percent in 2019-20. Growth is projected to be 6.7 percent in the last fiscal, ended 31 March. “The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the ratings are broadly balanced,” Fitch said. The Fitch review for annual sovereign rating follows India’s rating upgrade by Moody’s after a gap of 14 years. S&P had retained the earlier rating. Fitch said India’s fiscal finances are weak but current account deficit position is favourable. Per capita GDP is the lowest among ‘BBB’ range peers and continued structural reform implementation should enhance productivity. “India has the highest medium-term growth potential among the largest emerging markets,” according to Fitch analysis. Fitch has kept rating unchanged at ‘BBB-’, the lowest investment grade, with stable outlook. The rating was assigned to the country 11 years ago. Fitch had last upgraded the rating from ‘BB+’ to ‘BBB-’ with stable outlook on 1 August, 2006. Later, it changed the outlook to negative in 2012 and then again to stable in the following year, though it kept the rating unchanged at the lowest investment grade.