India Union Budget 2018-19: Fitch follows Moody's and S&P; places India atop emerging markets growth potential list

After Moody's and Standard & Poor's, now, the third of the 'Big Three credit rating agencies', Fitch Ratings, has also backed India.

The New York and London joint-headquartered Fitch Ratings has placed India at the top of the list of ten largest emerging markets in its Global Economic Outlook (GEO) forecast.

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Fitch has highlighted that India's 6.7% per annum projected potential growth exceeds China and Indonesia's 5.5% per annum figure. 

In its reasoning, Fitch explains:

India in particular, but also Indonesia, Mexico, Turkey and Brazil are set to see continued robust growth in working-age population in the next five years, bolstering GDP growth potential.

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In contrast, Fitch says, in Russia, Poland, China and Korea, headwinds from deteriorating demographics will sharpen and weigh growth. 

Fitch has also cited India for having an impressive rate of capital accumulation per worker, implying increasing productivity. However, it has said that in terms of Total factor productivity (TPF), i.e. a measure that captures improvements in the efficiency of the production process, India has been 'surprisingly weak given its low level of GDP per capita'.

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Here are the projected potential growth (per annum) for the countries in Fitch's list:

India: 6.7%
China: 5.5%
Indonesia: 5.5%
Turkey: 4.8%
Mexico: 2.5-3%
Poland: 2.5-3%
South Korea: 2.5-3%
South Africa: <2%
Brazil: <2%
Russia: <2%