India’s Economic Growth Rate Will Be Less Than One Percent- An Economic Shock.
Fitch Ratings has once again predicted India’s economic growth forecasts for the fiscal year 2020-21. Fitch has reduced this to 0.8 percent. It has stated that the world is going through an unprecedented global recession due to the coronavirus epidemic. In its global economic outlook, Fitch Ratings stated that India’s GDP growth rate will fall to 0.8 per cent during April 2020 to March 2021 (FY- 21), compared to 4.9 per cent (estimated) for the previous fiscal year. However, the growth rate is expected to be 6.7 percent in 2021-22.
At the same time, growth is expected to reach 1.4 per cent in the last quarter of the 2020 calendar year.The decline in growth rate for FY 2021 was mainly due to the projected decline in consumer spending, which will come down to 0.3 per cent as against 5.5 per cent last year. Also, the fixed investment declined due to a contraction of 3.5 per cent.
The rating agency estimates that there will be negative growth for two consecutive quarters in the current financial year. It can be -0.2 per cent for the April-June quarter and -0.1 per cent for the July-September quarter. Along with this, the rating agency has also made major cuts in global GDP forecasts. In this context, Fitch Rating’s Chief Economist, Brian Coulton said that the world GDP is projected to decline 3.9 percent in 2020.
According to the World Bank, the country’s economic growth rate may be 1.5 to 2.8 percent in 2020-21. This would be the slowest growth rate since the economic reforms in 1991.The Asian Development Bank (ADB) projected India’s economic growth to be four percent in 2020-21.Centrum Institutional Research also lowered the economic growth rate estimate from 5.2 per cent to 3.1 per cent in 2020-21.
Credit rating agency S&P Global Ratings also lowered India’s growth forecast for the current financial year to 1.8 per cent. The cuts were made in the wake of the global epidemic caused by coronavirus infection. According to the agency, it may increase to 7.5 percent in 2021-22.
