This is only the second time in the country's history that credit scores have been cut. Rating agency Standard & Poor's downgraded the US to an expected three A's in 2011 after a controversy over government debt.
Last month in an unscheduled policy announcement, the Reserve Bank of India (RBI) raised rates by 40 basis points to 4.4 per cent, and subsequently to 4.9 per cent last week.
"The Outlook revision reflects our view that downside risks to medium-term growth have diminished due to India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock," the ratings said.
In its Global economic Outlook-March 2022, Fitch said the post-COVID-19 pandemic recovery is being hit by a potentially huge global supply shock that will reduce growth and push up inflation.
The downgraded rating is in speculative or junk category reflecting default risk. It signifies that even though financial commitments are currently being met, the sovereign is vulnerable to high credit risk.
Fitch Ratings on Monday said it expects a moderately worse sector outlook for Indian banks for the next fiscal beginning April 1 based on muted expectations for new business and revenue generation, and deteriorating asset quality.
Fitch Ratings on Friday said the revival of the government's reform agenda in response to the coronavirus pandemic shock has the potential to raise India's medium-term growth rate.
Fitch Ratings on Tuesday projected a massive 10.5 per cent contraction of India''s economy in the current financial year. India recorded one of the sharpest gross domestic product (GDP) contractions in the world in April-June.
Fitch Solutions Country Risk and Industry Research on Friday said the motorcycle segment in India would perform better than the rest of the auto industry as more consumers will be forced to enter the bike segment due to increased financial pressure amid coronavirus pandemic.
Fitch Ratings on Thursday said it has upgraded Reliance Industries Ltd's rating to 'BBB+' from 'BBB' as the company's financial profile has improved following sale of nearly 25 per cent stake in Jio and Rs 53,124 crore equity raise.
Auto volumes are expected to recover partly in the second half of the ongoing financial year as sales gradually increase after the easing of lockdown measures since May, Fitch Ratings has said.
The country's farm trade, which was disrupted during the COVID-19 lockdown due to logistic issues in March-June, is expected to rebound in the second half of the calendar year 2020, said analytics firm Fitch Solutions in its latest report.
India is very likely to come out with another round of fiscal stimulus package, worth about 1 per cent of GDP in the coming months, Fitch Ratings said on Monday.
The rating agency has revised down its economic growth forecast for India to 0.8 per cent for the fiscal year ending March 2021 (FY21), reflecting the impact of the coronavirus pandemic and official efforts to contain it. This is down sharply from its forecast of 5.6 per cent prior to the outbreak.
A large number of active pharmaceutical ingredients (APIs), or bulk drugs, that are used for the manufacturing of drugs are exported from China. India for instance imports almost 70 per cent of its bulk drugs and intermediates from China.
Fitch said for developed market sovereigns, multi-notch downgrades have taken place historically amid large and sudden increases in government debt and this looks to be a certainty in many countries in 2020.
India has seen its number of cases increase rapidly, it said adding that the number of cases is expected to continue to rise, driving demand for healthcare services.
The WHO has declared coronavirus pandemic. Over 2 lakh people have been infected globally and the disease caused by it — COVID-19 — has claimed over 9,000 lives. In India, there are about 195 positive cases and 4 deaths so far from the deadly virus.
The RBI superseding the board of Yes Bank casts light on governance risks in India's banking sector, Fitch Ratings said on Friday
India's non-banking financial companies will look increasingly to offshore financing as local funding conditions may remain under pressure, Fitch Ratings said on Tuesday.
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