New Delhi: Rating agency Fitch on Friday kept India's sovereign rating unchanged at 'BBB-', the lowest investment grade, with stable outlook saying that weak fiscal balances constrain ratings.
In May last year too, Fitch kept India's rating unchanged at 'BBB-', with stable outlook. The rating was assigned to the country 12 years ago.
"India's rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment," Fitch said.
It projected India's growth at 7.3 percent in current the fiscal and further to 7.5 percent in 2019-20. Growth is projected to be 6.7 percent in the last fiscal, ended March 31.
Fitch had last upgraded the rating from 'BB+' to 'BBB-' with stable outlook on August 1, 2006. Later, it changed the outlook to negative in 2012 and then again to stable in the following year, though it kept the rating unchanged at the lowest investment grade.
While Moody's had in November 2017 raised India's sovereign rating from the lowest investment grade of 'Baa3' to 'Baa2' -- the first upgrade in almost 14 years, and changed the outlook from stable to positive, S&P refrained from upgrading the rating from 'BBB-' citing high government debt and low income levels.
S&P has maintained 'BBB-' rating on India since 2007.
After the Budget for 2018-19, presented in Parliament on February 1, Fitch Ratings had said that high debt burden of the government constrains India's rating upgrade. India's debt:GDP ratio currently stands at around 69 percent.
With PTI Inputs