Fitch changes India’s sovereign rating, cuts GDP growth forecast for the current financial year

Fitch Ratings has changed India’s sovereign rating outlook on Friday. It has stabilized India’s sovereign setting from negative. Because the risk of a slowdown in growth over the medium term has been reduced due to rapid economic recovery. Fitch Ratings ,Fitch Ratings) has retained India’s sovereign rating at ‘BBB-‘. However, Fitch cut India’s economic growth forecast for the current financial year from 8.5% to 7.8%. The rating agency said, the change in outlook reflects our view that the risk of slowing growth in the medium-term has reduced due to economic recovery in India and easing financial sector vulnerabilities, despite shocks in global commodity prices. .

GDP growth cut due to inflation

However, Fitch Ratings has lowered the economic growth forecast for the current fiscal to 7.8 per cent, which was earlier expected to be 8.5 per cent. This cut was made due to the rise in inflation due to the rise in global commodity prices.

World Bank also reduced India’s GDP growth forecast

Let us tell you that in view of rising inflation, supply related concerns and Russia-Ukraine crisis, the World Bank has reduced India’s GDP growth forecast for the current financial year to 7.5 percent. This is the second time that the World Bank has revised its growth rate estimates for India’s current fiscal year 2023.

In April, it lowered the forecast from 8.7 per cent to 8 per cent and is now projected at 7.5 per cent. In the financial year 2021-22, the economy had seen a growth of 8.7 percent.

RBI retains growth rate forecast at 7.2%

The Reserve Bank of India has retained the economic growth forecast of 7.2 percent for the current financial year (2022-23). The central bank has said that there has been an improvement in urban demand, while the situation of rural demand is also improving gradually, in view of which it has not changed the growth rate forecast. Das said the Indian economy remains strong and the central bank will continue to support growth.

The central bank estimates that the growth rate of gross domestic product (GDP) will be 16.2 percent in the first April-June quarter of the current financial year. It will come down to 4 per cent in the fourth January-March quarter. However, the governor cautioned that there are risks on the growth front because of the Russo-Ukraine war.