In surprise move, Fitch revises India outlook - Times of India

Fitch said it expects the government to broadly meet its 2013-14 budget deficit target of 4.8% of GDP and to gradually reduce the high level of public debt over the medium-term. The author has posted comments on this articleTNN | Jun 13, 2013, 05.50AM IST NEW DELHI: Fitch Ratings on Wednesday revised the outlook on India's sovereign rating from "negative" to "stable". However, it maintained its BBB (minus) rating for the country. The move to revise India's rating outlook comes days after finance ministry sources said the agency has been asked to explain why it shared India's rating file and confidential data with the US Securities and Exchange Commission. Fitch denied the charge, but the outlook revision is bound to raise questions about its timing. IIP growth slows to 2% in April India's industrial output growth remained sluggish with a rise of 2% in April due to weakness in the manufacturing , mining and electricity sectors, triggering calls for interest rate cuts. Revising its outlook on India's sovereign rating from "negative" to "stable", Fitch Ratings on Wednesday said Indian authorities have been successful in containing the upward pressure on the Union Budget deficit in the face of a weaker-than-expected economy. It also cited some progress by the government in addressing structural impediments to investment and growth. The outlook revision comes against the backdrop of fresh economic challenges with the rupee in a freefall and concerns over growth and the pace of economic reforms. India has been battling a ratings downgrade after deterioration of its public finances and slowdown in growth, but since last September, the government has taken steps to trim the fiscal deficit. Standard & Poor's is now the only rating agency which still has a negative outlook on India's rating. Like Fitch, Moody's also has a stable outlook. Fitch said it expects the government to broadly meet its 2013-14 Budget deficit target of 4.8% of GDP and to gradually reduce the high level of public debt over the medium-term. It also said the authorities have also begun to address structural factors that have weakened the investment climate and growth prospects, notably regulatory uncertainty, delays in government approvals of investment projects and supply bottlenecks, for example, in the power and mining sectors. "Nonetheless, the investment climate could benefit from further reforms, such as the new land acquisition bill, some liberalisation of insurance and pension provision and public procurement, which are pending parliamentary approval. Addressing the structural issues in the power and mining sectors would further boost investor confid ence," Fitch said in a statement. It expects the economy to recover after real GDP grew just 5% in 2012-13, but cautioned that India's economic recovery is likely to remain slow until a healthier investment climate is created, which helps lift potential growth. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGN5P1LahdHsDB0xgK4tV4ltagRRg&url=http://timesofindia.indiatimes.com/business/india-business/In-surprise-move-Fitch-revises-India-outlook/articleshow/20565991.cms

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