Despite Finance Minister P Chidambaram’s promise to put India’s fiscal house in order in his latest budget plan, ratings agency Fitch said the country’s credit rating – which is teetering on the brink of ‘junk’ status – will more than likely be downgraded, citing weakness in Asia’s third largest economy’s macro outlook.
“The reality is it [credit rating] is on negative outlook – so that bias suggests it’s more than likely we will downgrade – that says it all,” Art Woo, director, sovereign ratings at Fitch Ratings told CNBC Asia’s “The Call” on Friday – a day after Chidambaram presented a pragmatic budget in which he announced a fiscal deficit target of 4.8 percent for the new fiscal year beginning April 1.
“If you look at the totality of measures that have been announced over the last six months, there have been some positive elements…but obviously the macro economic backdrop has weakened,” he added.
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