Indian economy got a breath of relief amid the ongoing gloom, with Fitch Ratings showing confidence in the country’s growth outlook and maintaining the country’s sovereign debt rating. Fitch Ratings on Friday affirmed India’s sovereign credit rating at ‘BBB-’, with a stable outlook. The rating agency said that India’s growth outlook is still ‘solid’ as compared to peers, projecting India’s current financial year 2019-20 at 4.6%. It also said that India’s GDP in the next financial year 2020-21 will likely grow at 5.6%. In FY22, the growth is expected to recover to 6.5% with support from easing monetary and fiscal policy.
The decision incorporates expectations of moderate fiscal slippage relative to the central government’s deficit target in FY20. The global rating agency also expected the Reserve Bank of India (RBI) to cut its policy rate by another 65 bps in 2020. The RBI has already effected a 135 bps cut as part of easing since February 2019.
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In the last bi-monthly monetary policy committee (MPC) meet, revised GDP growth downwards to 5 per cent for 2019-20 from 6.1 per cent projected in October policy.
Source: Financial Express