NewsClick

NewsClick
  • हिन्दी
  • Politics
  • Economy
  • Covid-19
  • Science
  • Culture
  • India
  • International
  • Sports
  • Articles
  • Videos
search
menu

INTERACTIVE ELECTION MAPS

image/svg+xml
  • All Articles
  • Newsclick Articles
  • All Videos
  • Newsclick Videos
  • हिन्दी
  • Politics
  • Economy
  • Science
  • Culture
  • India
  • Sports
  • International
  • Africa
  • Latin America
  • Palestine
  • Nepal
  • Pakistan
  • Sri Lanka
  • US
  • West Asia
About us
Subscribe
Follow us Facebook - Newsclick Twitter - Newsclick RSS - Newsclick
close menu
×
For latest updates on nCOVID-19 around the world visit our INTERACTIVE COVID MAP
Politics
India
Economy

S&P Slashes India Growth Forecast, Says Economy to Contract 9% in FY21

COVID-19 will restrain economic activity, will keep private spending and investment lower for longer, says global rating agency.
PTI
14 Sep 2020
S&P Slashes India Growth Forecast, Says Economy to Contract 9% in FY21

New Delhi: S&P Global Ratings on Monday slashed its FY21 growth forecast for India to (-) 9 per cent, from (-) 5 per cent estimated earlier, saying that rising COVID-19 cases would keep private spending and investment lower for longer.

"One factor holding back private economic activity is the continued escalation of the COVID-19," S&P Global Ratings Asia-Pacific Economist Vishrut Rana said.

Rising COVID-19 cases in India will keep private spending and investment lower for longer. S&P Global Ratings now expects the country's economy to contract by 9 per cent in the current fiscal year, which ends March 31, 2021, the US-based rating agency said in a statement.

For 2021-22 fiscal, it expects economic growth at 10%.

S&P had earlier forecast India's economic contraction at 5%.

It said risks to the growth outlook include a weaker recovery in informal sectors of the economy and deeper economic losses for micro and small enterprises.

"In addition, if credit quality worsens materially following the expiration of loan moratoriums, the recovery will slow. One factor that presents potential upside to growth is the availability of a widely-distributed COVID vaccine earlier than our current estimate around mid-2021," S&P added.

It said the 23.9% contraction in the April-June quarter was larger than expected.

"While India eased lockdowns in June, we believe the pandemic will continue to restrain economic activity. New cases per day in India averaged nearly 90,000 in the week ending September 11, according to data from the World Health Organisation.

"This is up from an average of about 70,000 per day in August. As long as the virus spread remains uncontained, consumers will be cautious in going out and spending and firms will be under strain," S&P said.

Last week, two other global rating agencies Moody's and Fitch projected Indian economy to contract 11.5% and 10.5%, respectively, in the current fiscal. However, Goldman Sachs has estimated the contraction at 14.8%.

Domestic agencies India Ratings and Research projected contraction at 11.8%, while Crisil estimated contraction at 9%.

 S&P said even as industrial activity is recovering faster than services, high frequency indicators suggest that output is still lower relative to the same period last year and hence growth for the July-September quarter will be negative year on year.

"The potential for further monetary support is curbed by India's inflation worries," Rana said.

The Reserve Bank of India has cut policy rates by 115 basis points so far this year, to 4%. However, rising food inflation has pushed inflation to 6.9% in July, higher than the upper band of the central bank's 2-6% target range.

This will constrain the central bank from cutting policy rates further, it said.

S&P said India's high deficits limit the scope for fiscal stimulus and, the targeted fiscal stimulus measures announced so far amounts to about 1.2% of GDP.

"This magnitude is lower compared with global averages. The International Monetary Fund estimates that on average comparable stimulus measures across global emerging markets have been about 3.1% of GDP," S&P added.

Get the latest reports & analysis with people's perspective on Protests, movements & deep analytical videos, discussions of the current affairs in your Telegram app. Subscribe to NewsClick's Telegram channel & get Real-Time updates on stories, as they get published on our website.
Indian Economy
GDP Contraction
S&P Forecast
COVID-19
Consumer Expenditure
Private Investment
Related Stories
vaccine hesitancy

When an Anti-Science Dispensation Faced Vaccine Hesitancy

civic staff.

Delhi: Strike for Pending Wages by Civic Staff May Hit COVID Vaccine Campaign

Vaccination in tamilnadu

TN Follows Forced Vaccination, Health Workers Fear Loss of Job

COVID Forced Consent Vaccine

Forced Consent and No Transparency Can Create a Backlash against Vaccines

US sanctions on Venezuela

USA’s Game Plan in Venezuela: Strangulation through Sanctions

WB vaccination

COVID-19: WB Doctors Forum Lists Concerns about Vaccine, Resents Dilution of Protocol

South Africa's Trailblazing Black Food Writer Dies of COVID-19

South Africa's Trailblazing Black Food Writer Dies of COVID-19

covid 19 vaccine J&K

COVID-19: Amid Apprehensions, over 3,700 Vaccinated in J&K in Two Days

Chine economy

China’s Economy Grows by 2.3% in 2020, Bucks Global COVID-19 Slowdown Trend

100 Former Civil Servants Raise Questions on Transparency in PM-CARES Fund

100 Former Civil Servants Raise Questions on Transparency in PM-CARES Fund

Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share
Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share

Related Stories

PTI

Pandemic Far from Over, but Winter Can’t Stop Spring: Xi Jinping

25 January 2021
New Delhi/Davos: Calling for greater international cooperation, Chinese President Xi Jinping on Monday said the pandemic is far from over despite i
PTI

COVID-19: Latest Sero Survey Hints Delhi Could be Heading Toward ‘Herd Immunity'

25 January 2021
New Delhi: The outcome of the fifth round of s
Associated Press

Larry King, Broadcasting Icon for Half-Century, Dies at 87

23 January 2021
Los Angeles: Larry King, the suspenders-sporti

Pagination

  • Next page ››

More

  • Normal Life Disrupted in Kashmir as Restriction, Shutdown Mark Republic Day

    Normal Life Disrupted in Kashmir as Restriction, Shutdown Mark Republic Day

  • Digital Right Organisations condemn internet shutdown in Delhi

    Digital Right Organisations Condemn Internet Shutdown in Delhi

  • Farmers’ Parade is a Fitting Reply

    “Farmers’ Parade is a Fitting Reply to Those Who Consider us Mutthi Bhar Log”

  • How Prepared Punjab Farmers Are for R-Day Tractor Parade

    Here is How Prepared Punjab Farmers Are for R-Day Tractor Parade

  • Load More
Subscribe
connect with
about