Fitch cuts GDP growth forecast to 8.7%

New Delhi: Fitch Ratings has cut India's economic growth forecast to 8.7 per cent for the current fiscal, but raised GDP growth projection for FY23 to 10 per cent, saying the second Covid-19 wave delayed rather than derailing the economic recovery. Earlier, Fitch predicted 10 per cent GDP growth for India in FY22.

In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors".

The 'Negative' outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India's public finances due to the pandemic shock. Fitch said it has further lowered India's GDP forecast for the fiscal year ending March 2022 (FY22) to 8.7 per cent from 10 per cent in June as a result of the severe second virus wave.