Today, Fitch Ratings has revised the outlook on India's sovereign ratings to negative from stable but retained the ratings at the lowest investment grade. Fitch expects economic activity to contract by five per cent in the current financial year from the strict lockdown measures imposed since 25 March 2020, before rebounding by 9.5 per cent during the next year. The rebound will mainly be driven by a low-base effect.
S&P on June 10, retained India's sovereign rating at 'BBB-' with a stable outlook, saying that while risks to growth are rising, the economy and fiscal position will stabilise and begin to recover from 2021 onwards.India's long-term rating was affirmed at 'BBB-' with a stable outlook while the short-term rating was held at 'A-3'. S&P has forecast India's economy to shrink by 5 per cent this fiscal.