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.
The proposed reorganisation plan by Reliance Industries Ltd to transfer its refining, marketing and petrochemical (oil-to-chemicals) businesses to a wholly-owned subsidiary is a step towards facilitating participation by strategic investors in the unit, Fitch Ratings said on Tuesday.
Fitch said India's coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support.
In September, Fitch had sharply lowered its forecast for India's gross domestic product (GDP) to a contraction of 10.5 per cent in current fiscal 2020-21 (FY21) versus its previous estimate of 5 per cent contraction.
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.
With coronavirus lockdowns pummelling fuel demand in India, Fitch Ratings expects the marketing and refining volume of state-owned oil firms to fall by more than 15 per cent in the current fiscal year before a gradual recovery in 2021-22.
The Supreme Court's decision to allow telcos to pay outstanding dues over 10 years will not be enough to help Vodafone Idea to stabilise its position, while Jio and Airtel are expected to strengthen their market shares through subscriber gains, Fitch Ratings has said. It further said another tariff hike of at least 20 per cent is probable in the next 12 months.
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 Ratings on Monday said recovery of non-banking financial institutions (NBFIs) in near-term is not probable as the sector continues to wrestle with the fallout from the COVID-19 pandemic.
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 move comes after another rating agency Moody’s earlier this month downgraded India’s sovereign rating by a notch to lowest investment grade of ‘Baa2’ for the first time in 22 years.
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.
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