Modi Government gets 'relief' news amidst all economic challenges
Saturday - December 21, 2019 11:10 am ,
Category : WTN SPECIAL
Fitch Ratings reports 'satisfactory' on Indian economy
Indian Economy sets stronger than other countries, GDP growth rate to improve soon
DEC 21 (WTN) - The Indian Economy has suffered a setback due to the global economic slowdown. It is not that the economic slowdown has affected the economy of India only. According to a report by the International Monetary Fund, the economic slowdown has affected 90 percent of the world's economies. But fast-growing economies like India and Brazil have had a major impact on the economic slowdown. Along with the US-China trade war, there are many factors that are affecting the Indian Economy. Several rating agencies of the world including India have released reports on the impact of the global economic slowdown on the Indian Economy, according to which India's GDP growth rate is going to be much lower this time than expected.
But amidst all the reports, Fitch Ratings has reported some relief for the Modi Government. For your information, let us know that the credit rating agency Fitch Ratings has kept India's long term rating as 'BBB-'. Not only this, but Fitch ratings have also kept the outlook of the Indian Economy as 'stable'. For the sake of information, Fitch Ratings has said in its report regarding the Indian Economy, "Our outlook on India's GDP growth as compared to other countries is still strong. However, a decline in growth rate has been recorded in the last few quarters, which has also been followed by domestic factories.”
As we told you, Fitch has placed India's long term rating in the 'BBB-' category. This means that India's economy is still strong compared to other countries. According to Fitch, some of the internal crises of the Indian Economy have been hindering it from recovering from the economic slowdown, such as high levels of public debt, weak financial sector, and fiscal deficit, among many other factors that negatively impact India's economy. But because of being a large economy with strong foreign exchange reserves, the Indian Economy is capable of handling both external and internal risks.
A number of estimates are being made by the rating agencies about India's GDP growth rate for the current financial year. On the other hand, if we talk about Fitch ratings, according to Fitch, India's GDP growth rate will be less than 5 percent in the current financial year and it can be close to 4.6 percent. According to Fitch, the GDP growth rate has also come down in India due to the credit crisis of the NBFC (Non-Banking Financial Company) and in a decline in consumer confidence.
By the way, Fitch Ratings has a positive attitude towards the Indian Economy. Fitch has estimated that India's GDP growth rate could be 5.6 percent in FY 2020-21. At the same time, if there is further improvement in the global and domestic levels in the coming years, India's GDP growth rate can be 6.5 percent in FY 2021-22. Fitch believes that this increase in GDP growth rate in the coming years may be due to increased cash in the market and possibly better fiscal policies.
But at the same time, Fitch has said in its report that the growing fiscal deficit can have a negative impact on the GDP growth rate. Indeed, Fitch Ratings has clarified that the projected GDP growth rate of 4.6 percent for the current fiscal year 2019-20 is based on the fiscal deficit target. For your information, let us know that the current fiscal deficit is 3.3 percent of GDP. Fitch believes that keeping the balance between the fiscal deficits and taking tough decisions to speed up the economy will be a challenging task for the Modi Government. Now it has to be seen how the Modi Government can deal with these challenges?
DEC 21 (WTN) - The Indian Economy has suffered a setback due to the global economic slowdown. It is not that the economic slowdown has affected the economy of India only. According to a report by the International Monetary Fund, the economic slowdown has affected 90 percent of the world's economies. But fast-growing economies like India and Brazil have had a major impact on the economic slowdown. Along with the US-China trade war, there are many factors that are affecting the Indian Economy. Several rating agencies of the world including India have released reports on the impact of the global economic slowdown on the Indian Economy, according to which India's GDP growth rate is going to be much lower this time than expected.
But amidst all the reports, Fitch Ratings has reported some relief for the Modi Government. For your information, let us know that the credit rating agency Fitch Ratings has kept India's long term rating as 'BBB-'. Not only this, but Fitch ratings have also kept the outlook of the Indian Economy as 'stable'. For the sake of information, Fitch Ratings has said in its report regarding the Indian Economy, "Our outlook on India's GDP growth as compared to other countries is still strong. However, a decline in growth rate has been recorded in the last few quarters, which has also been followed by domestic factories.”
As we told you, Fitch has placed India's long term rating in the 'BBB-' category. This means that India's economy is still strong compared to other countries. According to Fitch, some of the internal crises of the Indian Economy have been hindering it from recovering from the economic slowdown, such as high levels of public debt, weak financial sector, and fiscal deficit, among many other factors that negatively impact India's economy. But because of being a large economy with strong foreign exchange reserves, the Indian Economy is capable of handling both external and internal risks.
A number of estimates are being made by the rating agencies about India's GDP growth rate for the current financial year. On the other hand, if we talk about Fitch ratings, according to Fitch, India's GDP growth rate will be less than 5 percent in the current financial year and it can be close to 4.6 percent. According to Fitch, the GDP growth rate has also come down in India due to the credit crisis of the NBFC (Non-Banking Financial Company) and in a decline in consumer confidence.
By the way, Fitch Ratings has a positive attitude towards the Indian Economy. Fitch has estimated that India's GDP growth rate could be 5.6 percent in FY 2020-21. At the same time, if there is further improvement in the global and domestic levels in the coming years, India's GDP growth rate can be 6.5 percent in FY 2021-22. Fitch believes that this increase in GDP growth rate in the coming years may be due to increased cash in the market and possibly better fiscal policies.
But at the same time, Fitch has said in its report that the growing fiscal deficit can have a negative impact on the GDP growth rate. Indeed, Fitch Ratings has clarified that the projected GDP growth rate of 4.6 percent for the current fiscal year 2019-20 is based on the fiscal deficit target. For your information, let us know that the current fiscal deficit is 3.3 percent of GDP. Fitch believes that keeping the balance between the fiscal deficits and taking tough decisions to speed up the economy will be a challenging task for the Modi Government. Now it has to be seen how the Modi Government can deal with these challenges?
