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Budget shows govt’s continued commitment towards maintaining macro stability: Fitch
Feb-02-2026

Fitch Ratings has said that India's Union Budget 2026-27 shows the government’s continued commitment towards maintaining macro stability through a gradual path of government debt reduction balanced against a still-robust capex program to enhance growth prospects.

While the budget did not announce any major new reform measures, Fitch said it expects more reforms, particularly on the deregulation agenda in the coming period. It said strong Gross Domestic Product (GDP) growth is driving positive momentum in several of India's sovereign credit metrics and if sustained, could improve the credit profile over time, even as fiscal challenges persist. 

The agency further said building on recent reform momentum should help accelerate private investment and give greater upside and resilience to India's potential growth. It said fiscal consolidation is set to be very modest with fiscal deficit target at 4.3 per cent of GDP in FY27, marginally lower than 4.4% in FY26. It said ‘the slowing pace of consolidation is in line with our view that further progress on deficit reduction is becoming more difficult without compromising more on GDP growth’. Fitch expects India's economic growth in FY27 to remain around 6.4 percent. It added that the continued emphasis on capex spending should be supportive of both near and medium-term prospects.  


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