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Keeping the rating unchanged at 'BBB-', credit rating agency, Fitch Ratings in its latest report has revised the outlook on India's sovereign rating to Stable from Negative as downside risks to medium-term growth have diminished due to India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock.

The rating agency, however, cut the economic growth forecast to 7.8 percent for the current fiscal (April 2022 to March 2023) from the 8.5 percent prediction it made in March due to the inflationary impact of the global commodity price shock.

Meanwhile, India’s economy grew by 4.1 per cent in the January-March quarter of 2021-22 (Q4FY22), pushing the annual growth rate to 8.7 per cent on account of better performance by manufacturing, mining and construction sectors. In the previous fiscal 2020-21, the economy had contracted by 6.6 per cent as the COVID-19 pandemic disrupted business activities.