Fitch revises India outlook to ‘Stable’, cuts GDP forecast to 7.8% for 2022-23

Fitch slashed India’s economic growth in 2022/23 from 8.5% in March to 7.8% in March, saying the inflationary effects of the global commodity price shock were slowing some positive growth momentum.

Fitch Ratings on Friday revised its outlook on India’s long-term foreign currency issuer’s default rating (IDR) from “negative” to “stable”, citing reduced risks for medium-term growth.

The ratings agency said that despite the near-term headwinds from global commodity price shocks, the risks to the country’s medium-term growth have been reduced due to rapid economic recovery and easing weakness in the financial sector.

“High nominal GDP growth has facilitated near-term reductions in the debt-to-GDP ratio,” Fitch said in a statement.

Fitch slashed India’s economic growth in 2022/23 from 8.5% in March to 7.8% in March, saying the inflationary effects of the global commodity price shock were slowing some positive growth momentum.

However, Fitch’s projection is ahead of the Reserve Bank of India’s 7.2%.

In 2021/22, India’s economic growth was 8.7%.

Fitch has kept its BBB rating in India.

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