S&P Global Ratings forecast a nine per cent decline in the Indian economy in the current financial year. S&P on Monday lowered India’s growth forecast for 2020-21 to a negative nine percent. It had previously projected a five per cent decline in the Indian economy.
S&P Global Ratings Asia-Pacific economist Vishrut Rana said, “Private economic activity has come to a standstill due to the continued increase in the case of Covid-19”. The US rating agency said, “Due to increasing cases of Covid-19, private spending and investment in India will remain at a low level for a long time. S&P Global Ratings estimates that India’s gross domestic product (GDP) will decline by 9 percent in the fiscal year ending March 31, 2021. ‘
The rating agency said that the 23.9 per cent decline in GDP in the first April-June quarter of the current financial year was more than expected. S&P said, “India relaxed the lockdown in June. We believe that due to this epidemic, economic activities in the country will still be disrupted.
Moody’s and Fitch also reduced estimates
The rating agency said that as long as the virus does not stop spreading, consumers will be cautious in going out and spend and companies will be under pressure. Last week, two other global rating agencies, Moody’s and Fitch, also lowered India’s growth forecast.
Moody’s has projected a decline of 11.5 per cent in the Indian economy and 10.5 per cent in the current financial year. However, Goldman Sachs estimates that the Indian economy will decline by 14.8 percent in the current financial year.