US credit rating agency Fitch on Monday raised fresh questions over India’s economy, already hit by high government borrowing, rising imports and stalled reforms.
“The outlook revision reflects heightened risks that India’s medium- to long-term growth potential will gradually deteriorate if further structural reforms are not hastened, including measures to enhance the effectiveness of the government and create a more positive operational environment for business and private investments,” the agency said in a statement.
Fitch’s downgrade came barely two months after Standard and Poor’s (S&P), another credit rating agency, announced a similar outlook on India’s economy. S&P also warned last Monday that India ran the risk of losing its “investment grade” status among BRIC nations.
Moody’s also said last week said India’s economy is in stagflation, with notably weaker growth but inflation still stubbornly high.