Fitch affirms BBB- rating, says Covid surge may delay economic recovery

People waiting in line infront of a test centre to get a Covid test done. India has been experiencing an unprecedented surge in Covid-19 cases currently. (Representative image)

NEW DELHI: Fitch Ratings on Thursday affirmed ‘BBB-‘ sovereign rating for India, saying a recent surge in coronavirus cases may delay gross domestic product (GDP) recovery, but it won’t derail the economy.
It maintained a negative outlook for the rating reflecting “lingering uncertainty around the debt trajectory”.
“We forecast a 12.8 per cent recovery in GDP in the fiscal year ending March 2022 (FY22), moderating to 5.8 per cent in FY23, from an estimated contraction of 7.5 per cent in FY21,” it said.
“However, a recent surge in coronavirus cases poses increasing downside risks to the FY22 outlook. This second wave of virus cases may delay the recovery, but it is unlikely in Fitch’s view to derail it.”
It expected pandemic-related restrictions to remain localised and less stringent than the national lockdown imposed in 2020, and the vaccine rollout has been stepped up.


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