India`s growth outlook cuts nearly 2% by Fitch rating

Context 

• Amid the conflict between Russia and Ukraine , the rating agency Fitch has lowered India`s GDP forecast by 1.8% to 8.5%.

News Highlights

• A sharp rise in prices of energy due to the conflict cited as the cause of such decline in growth.
• This unexpected rise in inflation of up to 7% in the third quarter of this year will hamper the growth outlook.
• The global growth forecast has also been lowered by 0.2% to 2.8% for  2023.
• Earlier, Moody has also trimmed its growth outlook for the world and cut the growth outlook for India to 9.1from 9.5% for 2022.

Credit Rating agencies

• The rating agencies grew to aid investors all over the world.
• They provide the objective analysis and independent assessment of companies and countries that issue bonds, securities, and other debt instruments.
• They assist the retail and institutional investors in determining whether the issuer of bonds and securities will be able to meet their obligations.
• Standard & Poor’s (S&P) Moody’s and Fitch are the three most significant rating agencies in the world which provide information's regarding the creditworthiness of the companies.
• AAA or Aaa is the highest rating across all the three rating agencies indicating the highest level of creditworthiness of countries and private enterprises.