Fitch Ratings, one of the three internationally recognized statistical rating organisations, has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a stable outlook.

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"India's ratings balance a strong medium-term growth outlook and favourable external balances relative to peers with weak fiscal finances, a fragile financial sector and some lagging structural factors," the agency said in a statement.

Fitch said they expect India's FY19 Gross Domestic Product (GDP) growth at 7.8 percent, up from 6.7 percent in FY18. However, this forecast is subject to downside risks from tightening financial conditions, weak financial-sector balance sheets and high international oil prices, it added.

But for the following two financial years, Fitch said, the growth may decelerate to 7.3 percent due to same reasons.

"Risks to the macroeconomic outlook are significant, and include a drop in credit growth, resulting from further problems in the banking or shadow-banking sector," it said.

According to the rating agency, India's current-account deficit (CAD) to widen to 3.0 percent of GDP in FY19 and 3.1 percent in FY20 from 1.9 percent in FY18, as oil makes up more than a quarter of total imports.

"As with other emerging economies with current-account deficits, India has been vulnerable to shifts in market sentiment from global trade tensions and US monetary tightening," it added.

Fitch also expects India's general government debt at 69.8 percent of GDP in FY19 due to a weak fiscal position.

First Published:Nov 15, 2018 5:45 PM IST