New Delhi: Fitch Ratings on Thursday retained India's sovereign rating at 'BBB-', the lowest investment grade, with a 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 said in a statement.
It said a robust growth outlook continues to support India's credit profile. Fitch expects growth of 6.8 per cent in the current fiscal and 7.1 per cent in the next, supported by accommodative monetary policy, easing of bank regulations, and government spending.
"A weak fiscal position continues to constrain India's sovereign ratings. In this regard, the next government's medium-term fiscal policy will be of particular importance from a rating perspective," Fitch said while affirming the country's long-term foreign currency Issuer Default Rating (IDR) at 'BBB-' with a stable outlook.
The general elections, to be carried out from April 11 to May 19, 2019, will result in some temporary uncertainty about the policy agenda, it said, adding over the past 30 years, governments of different political persuasions have been generally reform-minded.