The bank credit growth rate in the country has undoubtedly fallen to the lowest level of 59 years at 5.56 percent in 2020-21, but in 2020 the level of bank debt reached 56 percent of the gross domestic product (GDP).
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The bank credit growth rate in the country has undoubtedly fallen to the lowest level of 59 years at 5.56 percent in 2020-21, but in 2020 the level of bank credit reached 56 percent of the gross domestic product (GDP). This is the highest bank loan ratio in 5 years. Despite this growth, this level is well below the ratio of peer countries and half of the overall average of G20 countries. This information has been revealed in the latest data of Bank of International Settlements (BIS).
According to the latest BIS data, the total outstanding bank credit in the country at the end of 2020 stood at $ 1,52,000 million, equivalent to 56.075 percent of GDP. But this figure is the second lowest level among Asian counterparts. Bank credit accounts for 135.5 percent of GDP in emerging market countries and 88.7 percent in developed countries.
This was the lowest growth in 59 years
Despite the announcement of a credit-focused stimulus package by the government in 2020 to overcome the impact of the Corona pandemic, there was only a 5.56 per cent year-on-year growth in credit growth. This was the lowest growth in the last 59 years. Earlier it was 5.38 per cent in the financial year 1961-62. Even in the previous financial year 2019-20, credit growth was at a 58-year low of 6.14 per cent. This has been shown in a recently released analysis research of State Bank.
Country’s bank credit ratio at 56% at 5 year high
Analysts believe that bank credit growth is an important indicator of economic growth. If the ratio of 100 percent to GDP remains, then the demand for credit remains very good in the economy without any apprehension. However, the country’s bank credit ratio is at a five-year high at 56 per cent, which was 64.8 per cent in 2015.
Moody slashes growth rate forecast
Moody’s Investors Service on Wednesday slashed India’s growth forecast for 2021 to 9.6 per cent, from 13.9 per cent in the previous estimate. Moody’s also said that due to rapid vaccination, economic restrictions will be limited in the June quarter.
Moody’s in a report titled ‘Massive Economics – India: The economic shocks from the second wave of COVID will not be as severe as last year’ said that high-frequency economic indicators suggest that the second wave of COVID has hit India’s economy in April and May. Impressed. However, this is expected to improve with the easing of restrictions by the states.
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