NEW DELHI: Finally a good news arrives for India, as Fitch Ratings said on Wednesday that Indian economy would register a sharp growth rate of 9.5 per cent next year if it manages to avoid further deterioration in its financial sector.
Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing fiscal. “The pandemic has drastically weakened India’s growth outlook and laid bare the challenges caused by a high public-debt burden,” Fitch Ratings said in its APAC Sovereign Credit Overview released on Wednesday.
“After the global crisis, India’s GDP growth is likely to return to higher levels than ‘BBB’ category peers, provided it avoids further deterioration in financial sector health as a result of the pandemic,” it said forecasting a 9.5 per cent real GDP growth next year.
Notably, the General government debt was 70 per cent of GDP in 2019-20, well above the ‘BBB’ rating median of 42 per cent. India’s ratio of public debt/GDP is expected to rise to 84 per cent of GDP in 2020-21 – up from a forecast of 71 per cent when Fitch Ratings affirmed the ‘BBB-‘ rating in December 2019.