Fitch warns India's slow debt reduction may impact sovereign rating stability

economictimes.indiatimes.com February 3, 2025, 09:00 PM UTC

Fitch Ratings has noted that India's slow pace of debt reduction poses risks to its sovereign rating. The agency remains confident in the government's fiscal policies, which aim to lower the fiscal deficit to 4.4% of GDP by 2025-26. The government plans to reduce the debt-to-GDP ratio to 50% by 2030-31. This will depend on achieving a projected nominal GDP growth of 10.1% for 2025-26, with revenue collections expected to rise by 10.8%. Fitch maintains India's sovereign rating at 'BBB-' with a stable outlook, unchanged since 2006. The agency emphasizes that the government's commitment to fiscal discipline is crucial for maintaining this rating amid economic challenges.


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