NEW DELHI, Oct 8 (NNN-PTI) – India’s gross domestic product (GDP) would grow at the rate of 8.7 percent, in the rest of the current fiscal year, down from the projection of 10 percent in June, said the American rating agency, Fitch Ratings, in a report yesterday.
The cut in growth forecast was attributed to the sharp deterioration in the country’s public finances, due to the pandemic shock, particularly as a result of the severe second virus wave that hit South Asian economy in Apr-May this year.
The projections for 2021-2022 fiscal, compares to a contraction of 7.3 percent recorded in the last financial year and a 4-percent growth in 2019-20.
“In our view, however, the impact of the second wave was to delay, rather than, derail India’s economic recovery, reflected in an upward revision of our Financial Year-23 (Apr 2022-Mar 2023) GDP forecast to 10 percent from 8.5 percent in June,” Fitch reported.
It also said, high-frequency indicators point to a strong rebound in the second quarter of the current fiscal (Apr 2021-Mar 2022), as “business activity again returned to pre-pandemic levels.”
The Reserve Bank of India, too, in July, cut India’s growth forecast to 9.5 percent for this fiscal, from 10.5 percent estimated earlier.
Meanwhile, the World Bank, in one of its reports yesterday said, India’s economy is expected to grow by 8.3 percent in the current fiscal year, aided by a rise in public investment and incentives, to boost manufacturing. It reportedly backed shifting to a services-led growth model, to strengthen the economic recovery.
While Standard & Poor’s Global Ratings lowered its growth estimate for India to 9.5 percent, another U.S.-based rating agency, Moody’s projected a 9.3 percent growth in the current fiscal ending Mar 2022. For the 2021 calendar year, Moody’s cut the growth estimate sharply to 9.6 percent.– NNN-PTI
