Moody’s reduced India’s growth rate estimate, said- second wave of Corona wreaked havoc

GDP Growth rate slashed : Rating agency Moody’s Investors Services has reduced India’s growth rate estimate to 9.6 percent. Moody’s had earlier given a growth rate estimate of 13.9 percent. Even though the rating agency has projected a growth rate of 9.3 percent for the current year, but in view of the decline in GDP growth rate to 7.3 in the financial year 2020-21, the actual growth rate will remain 2.3 percent. In the financial year 2019-20, the growth rate was 4 percent. At the same time, in the first quarter of the financial year 2020-21, there was a decline of 23.9 percent in the growth rate.

India’s credit profile risk increased

Earlier, Moody’s had forecast a growth rate of 9.3 percent in the financial year 2020-21. But the second wave of Corona has increased the risk of India’s credit profile. Moody’s report named ‘Macroeconomics-India’ states that the lockdown imposed in April and May due to COVID stopped the pace of economic activity. According to Moody’s, ‘the second wave of the virus has created uncertainty. However, it is likely that this economic loss will remain only between the quarter of April to June.

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The havoc of the second wave of Corona

According to the Moody’s report, the Indian economy will grow at a rate of 9.6 percent. At the same time, it is expected to grow at the rate of 7 percent in 2022. The report has said that India’s growth rate will largely depend on vaccination. Moody’s has said that by the third week of June, India had been able to vaccinate only 16 percent of the population. The economy can see a boom in the second half of the year because economic activities will also pick up pace due to the increase in vaccination. According to a Moody’s report, the loss due to the wave of COVID-19 this year has reduced compared to last year, however, the income of the middle class and low income group has declined.