Citing weak economic growth prospects and rising public debt, Fitch Ratings Ltd cut India’s outlook to negative, moving the country’s credit score a step closer to junk.
As the coronavirus pandemic spreads, India is heading for its first contraction in more than four decades in 2020. The country is bracing a fiscal deficit blowout. Due to the impact of the severe growth slowdown on revenue, public-sector debt ratios and the fiscal deficit, Fitch said fiscal metrics have deteriorated significantly, notwithstanding the government’s expenditure restraint.
Previously, Moody’s Investors Service downgraded the nation’s rating to the lowest investment score earlier this month. The outlook kept on negative watch. After Fitch’s move, little changed happened to India’s rupee, stocks and sovereign bonds. It was largely expected by markets after the downgrade by Moody’s.
