Bringing cheer to the government, global rating agency, Fitch today revised India’s sovereign credit outlook to stable, from negative. It also affirmed its BBB negative rating.
The agency said, in a statement, that the revision of the outlook reflects the measures taken by the government to contain the budget deficit, as well as some, albeit limited, progress in addressing some of the structural impediments to investment and economic growth.
Fitch further said that it expects the economy to recover modestly, with real GDP expected to expand by 5.7 per cent in 2013-14, and by 6.5 per cent in 2014-15.
On inflation, Fitch said the pressures have begun to show more pronounced signs of easing. While Fitch has revised down its assumption regarding India’s potential growth to 6 or 7 per cent, from 8 to 9 per cent, it nevertheless said that India remains one of the most dynamic and diversified economies in the world.