Fitch Ratings has raised India’s growth forecast for the next fiscal year 2021-22 to 12.8 percent. Earlier the rating agency had estimated the growth rate to be 11 percent in the next financial year. Fitch has stated in its latest global economic scenario (GEO) that India is recovering faster than expected from the recessionary situation caused by the lockdown. Fitch said it has revised India’s economic growth projections due to “stronger prior effects, fiscal stance and better containment of the transition”.
The rating agency said that with the revival in the second half of 2020, the gross domestic product (GDP) has reached its pre-epidemic level. In such a situation, we have revised the estimate of 2021-22 growth rate from 11 percent to 12.8 percent. With this, Fitch said, “We estimate that India’s GDP will be below our pre-epidemic estimates.”
The growth rate of GDP in December surpassed the pre-epidemic level. GDP grew by 0.4 percent on an annual basis during the quarter. This led to a drop of 7.3 percent in GDP in the previous quarter. The rating agency said that in the second quarter of the calendar year of 2020, the Indian economy went into recession due to lockdown. But after that it recovered faster than we anticipated. Fafich said that the economy has improved rapidly in the final months of 2020, following a reduction in infection cases and easing of restrictions in states and union territories.
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