While the economy of the country and the world continues to reel from the corona, rating agencies are declining ratings, there has been very good news in the meantime. Fitch Ratings has said that India’s high growth of 9.5 percent could be achieved again in the next financial year 2021-22.
Most of the rating agencies have released estimates of India’s GDP decline of 5 to 6 percent in 2020-21 this year due to coronavirus outbreak. Fitch Ratings itself has projected India’s GDP to decline by 5 percent this fiscal.
What Fitch said
“The epidemic has sharply weakened India’s growth outlook and posed challenges such as a high public debt burden,” Fitch Ratings said in its APAC sovereign credit overview released on Wednesday, according to news agency PTI. But after the global crisis, India’s GDP growth may return to the “BBB” category, unless the epidemic in its financial sector is further harmed. India’s GDP growth may be up to 9.5 percent in the next fiscal.”
It may be recalled that the Indian government had imposed the world’s largest lockdown on March 25 to deal with the corona and all economic activities were halted. The lockdown is still in force, but most of the activities have begun to open after May 4. The opening of the lockdown has given a lot of impetus to the economy and despite the rising corona cases, the wheels of the industry have been on the run.
Agencies lower India’s rating
Last week, rating agency Moody’s slashed India’s sovereign rating in view of the poor economy in the era of the Corona crisis. This has added to the challenge for the Indian government as it affects the country’s investment.
Earlier, India’s rating was ‘Baa2’, which has been reduced to ‘Baa3’. This is the weakest rating in terms of investment. Below it is just the junk i.e. ‘garbage’ rating left. Moody’s said India is at great risk of severe economic sluggishness, leading to mounting pressure on the fiscal target.