The Indian economy has been greatly affected due to the second wave of Corona. In such a situation, rating agency Fitch has already reduced the growth rate to 10 percent.
Growth rate expected to decline
The Indian economy has also been affected due to the Corona epidemic. In such a situation, Fitch Ratings agency has reduced the estimate of India’s growth rate for the current financial year. According to the previous estimate, it was 12.8 percent, now it has been reduced to 10 percent. However, Fitch believes that rapid vaccination can lead to a permanent revival of business and strengthen consumer confidence and improve the economy.
The reason for reducing the growth rate by rating agency Fitch is the slowing down of the pace of recovery after the second wave of COVID-19. The global rating agency said in a report that the challenges for the banking sector have increased in the first quarter of the current financial year due to the second wave of the corona virus epidemic. Therefore, for the financial year 2021-22, India’s real GDP is likely to be up to 10 percent.
Rating agency Fitch says the new restrictions have slowed reform efforts. Due to the lockdown in place, the business came to a standstill. Banks also had poor performance in business and revenue generation in the financial year 2021-22. Therefore, the improvement of the Indian economy is possible only when there is rapid vaccination. This will increase business and consumer confidence.
S&P Global Ratings also reduced the growth rate
Regarding the Indian economy, ie GDP, S&P Global Ratings gave a new estimate last month. In this, the rating agency has reduced India’s growth rate estimate for the current financial year 2021-22 from 11 percent to 9.5 percent.
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