Fitch Ratings anticipates a high probability of policy continuity in India, asserting that the existing administration is “most likely” to secure victory in the forthcoming general elections slated for April-May. The extent of the majority in the upcoming Indian Parliament, however, may shape the government's reform agenda.
Fitch underscores its belief that continuity is likely for both India and Bangladesh during their respective elections. Having initially assumed power in 2014, the Narendra Modi-led BJP government secured a robust majority in the 2019 elections.
With the 2024 general elections on the horizon, Fitch expresses expectations of Modi's government clinching a third term. While foreseeing continuity as a prevailing theme in the 2024 elections across its rated Asian sovereigns, Fitch notes potential credit profile impacts in Pakistan, Sri Lanka, and Taiwan due to varied factors such as IMF program implementation and geopolitical considerations.
Key Points:
1.Fitch Ratings suggests a high probability of policy continuity in India as the current administration is likely to retain power in the upcoming April-May general elections.
2.The extent of the majority in the next Indian Parliament may impact the government's reform agenda, according to Fitch Ratings.
3.Fitch anticipates the incumbent administration in India and Bangladesh to stay in power during their respective general elections in April-May and January, indicating a likelihood of consistent policy direction.
4."We believe it most likely that incumbent administrations will retain power in India (BBB-/stable) and Bangladesh (BB-/negative), during their general elections in April-May and January, respectively, pointing to the likelihood of broad policy continuity," Fitch said in a statement.
5.The BJP-led government, led by Prime Minister Narendra Modi, secured victories in the 2014 and 2019 general elections, and Fitch expects a similar outcome in the 2024 elections.
6.Fitch projects that nearly half of its rated portfolio in the Asian region will undergo legislative or presidential elections in 2024.
7.The rating agency emphasizes the theme of continuity as a significant factor in the elections among its rated Asian sovereigns scheduled for 2024.
8.Fitch sees a higher chance of election outcomes influencing credit profiles in Pakistan and Sri Lanka, dependent on successful IMF program implementation and official support, as well as Taiwan, considering potential geopolitical implications.
9.The statement underscores the global rating agency's expectation of broad policy stability in India and Bangladesh.
