News:Fitch Ratings has reduced the growth forecast of India’s gross domestic product(GDP) forecast to 5.5% in 2019-20 from 6.6%.
- Fitch has said that the decrease in credit availability due to crisis in non-bank financial companies (NBFC) sector has pushed Indian economic growth to a six year low.
- It has also said that the slowdown in domestic spending and world trade has also weakened the Indian economy.
- Further,the investment-led slowdown has also broadened into the consumption driven by financial stress among rural households and weak job creation.
- However,it has said that the government has taken several policy measures such as (a)easing of NBFCs’ liquidity positions by encouraging banks to purchase high-quality NBFC assets (b) capital is being injected into banks and (c)corporate tax cut to their lowest level.
- Hence,these measures should help the economy in picking up the economic growth to 6.2% in 2020-21 and 6.7% in 2021-22.
- Fitch Ratings is an international credit rating agency based out of New York City and London.It is a leading provider of credit ratings, commentary and research.
- Along with Moody’s and Standard & Poor’s,Fitch is one of the top three credit rating agencies.