Chennai– Global credit rating agency Fitch Ratings on Monday said it has affirmed India’s long term foreign and local currency issuer default ratings (IDR) at “BBB-“.

According to the rating agency, the outlooks on the long term IDRs are stable.

“The Country Ceiling is affirmed at ‘BBB-‘ and the Short-Term Foreign-Currency IDR at ‘F3’,” Fitch Ratings said in a statement.

As to the rating driver, it said the affirmation of India’s sovereign ratings balances a strong medium term growth outlook and favourable external balances against a weak fiscal position and still difficult business environment.

“However, the latter is likely to gradually improve with implementation and continued broadening of the government’s structural reform agenda,” the agency said.

According to Fitch Ratings, India exhibits one of the highest real gross domestic product (GDP) growth rates in the sovereign space.

“Its five-year average growth is among the 10 highest of all rated sovereigns and the 7.6 per cent real GDP growth in the financial year ended 31 March 2016 (FY16),” the statement said.

Fitch Ratings forecasts real GDP growth to slightly accelerate to 7.7 per cent in FY17 and 7.9 per cent in FY18.

According to Fitch Ratings, the stable outlook reflects its view that upside and downside risks to the ratings are balanced. The main factors that individually or collectively could lead to positive rating action are:

– Fiscal initiatives that would cause the general government debt burden to fall more rapidly than expected in the medium term.

– An improved business environment resulting from implemented reforms and persistently contained inflation, which would support higher private investment and real GDP growth. (IANS)