The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain. Photo: Reuters, Reinhard Krause
The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain. Photo: Reuters, Reinhard Krause

After US rating firm Moody’s upgraded India’s sovereign rating and Standard & Poor’s retained it, Fitch Ratings has cut India’s gross domestic product (GDP) growth forecast for the fiscal year ending March 2018 (FY18) to 6.7 per cent from its earlier projection of 6.9 per cent in September, citing ‘weaker than expected’ economic rebound.

In its latest global economic outlook, Fitch said, “The Indian economy picked up in the September quarter, with GDP growing by 6.3 per cent year-on-year, up from 5.7% in the June quarter. However, the rebound was weaker than we expected, and we have reduced our growth forecast for the fiscal year to end-March 2018 (FY18) to 6.7%.”

Fitch also slashed the FY19 forecast to 7.3% from 7.4%. “Growth has repeatedly disappointed in recent quarters, although this has partly reflected one-off factors including the demonetization of high value currency in November 2016 and disruptions related to the implementation of the Goods and Services Tax in July 2017,” it said.

The rating firm, however, said India’s central bank,  Reserve Bank of India (RBI), has headroom to “keep the policy rate low” to boost the economy.

RBI will be announcing its monetary policy on Wednesday and there is widespread expectation that it will maintain status quo on the policy rate.