The new wave of Corona has had a bad effect on the Indian economy. Cases have definitely decreased in vaccination but there has been a negative impact on the growth rate. Now Standard and Poor’s has reduced the growth outlook to 9.5 percent.
Due to the imposition of lockdown, there was a sharp reduction in economic activity.
Indian Economy: S&P Global Ratings on Thursday slashed India’s growth forecast for the current fiscal year to 9.5 per cent from 11 per cent, and warned that the risks associated with the Covid pandemic remain ahead. The agency downgraded the growth forecast saying that the imposition of lockdown by the states due to the second wave of COVID-19 in April-May led to a sharp reduction in economic activity.
S&P Global said, “We have reduced the forecast for growth in the current fiscal year from 11 per cent to 9.5 per cent, announced in March.” Growth will be disrupted during this period and India’s growth rate may be 7.8 percent in the next financial year ending March 31, 2023.
Rapid growth in vaccine will be supported
S&P said further risks to the pandemic remain as about 15 per cent of the population has received at least one dose of the vaccine so far, although the supply of the vaccine is now expected to accelerate. In the financial year 2020-21, the Indian economy had contracted by 7.3 per cent and before that in 2019-20, the country had achieved a growth of four per cent.
Moody’s lowers growth forecast to 9.6 percent
Meanwhile, Moody’s Investors Service on Wednesday also reduced India’s growth forecast for the year 2021 to 9.6 percent, which was 13.9 percent according to the previous estimate. Moody’s also said that due to rapid vaccination, economic restrictions will be limited in the June quarter.
Growth has been affected by the new wave
The report said that the return of the virus has increased uncertainty about India’s growth forecasts in 2021, although it is likely that the economic loss will be limited to the April-June quarter. Moody’s further said, “We expect India’s real GDP to grow at 9.6 per cent in 2021 and 7 per cent in 2022.” There was an increase of four per cent.
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