Retains India's rating at BBB-

Retains India
Highlights

Ahead of the general elections, Fitch on Thursday retained India's sovereign rating at 'BBB-', the lowest investment grade, with stable outlook, saying a weak fiscal position continues to constrain its rating

New Delhi: Ahead of the general elections, Fitch on Thursday retained India's sovereign rating at 'BBB-', the lowest investment grade, with stable outlook, saying a weak fiscal position continues to constrain its rating.

This is the 13th year in a row that global rating agency Fitch has rated India at 'BBB-'. It had last upgraded India's sovereign rating from 'BB+' to 'BBB-' with a stable outlook on August 1, 2006.

"India's ratings balance a strong medium-term growth outlook and relative external resilience stemming from strong foreign reserve buffers, against high public debt, a weak financial sector and some lagging structural factors," Fitch Ratings said in a statement.

Stating that a weak fiscal position continues to constrain India's sovereign ratings, Fitch said the next government's medium-term fiscal policy will be of particular importance from a rating perspective.

"Significant and politically difficult fiscal deficit reduction would be key to meet the general government debt ceiling of 60 per cent of GDP by March 2025, as introduced in the Fiscal Responsibility and Budget Management (FRBM) Act in February 2018," Fitch said while affirming the country's long-term foreign-currency Issuer Default Rating (IDR) at 'BBB-' with a stable outlook.

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