fitch: Fitch lowers growth forecast for FY23

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NEW DELHI: All three major global ratings agencies Moody’s, S&P and now Fitch have stable outlook for India’s sovereign ratings, which provides comfort to the policymakers battling to secure growth against the backdrop of geopolitical tensions.
The rating also balances India’s external resilience from solid foreign exchange reserve buffers against some lagging structural indicators, according to Fitch Ratings. It said GDP recovered by 8. 7% in the fiscal year ended March 2022 (FY22), and forecast GDP growth to remain robust at 7. 8% in FY23, lower than the 8. 5% forecast in March as the inflationary impacts of the global commodity price shock are dampening some of the positive growth momentum.
The agency said India’s strong medium-term growth outlook relative to peers is a key supporting factor for the rating and will sustain a gradual improvement in credit metrics. Fitch Rating said it expects inflation to remain elevated in FY23 at 6. 9% due to the sharp rise in global commodity prices and underlying demand pressures.

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