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Fitch Ratings: Corona’s Havoc will keep India’s GDP Growth Rate Minus 5% this Year

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Fitch Ratings said that a strict lockdown policy has been implemented in the country due to the coronavirus. This led to a drastic decline in economic activity, which will directly affect the growth rate of gross domestic product (GDP).


Inside:
  • Fitch Ratings said Corona suffered heavy losses to the Indian economy
  • The crisis has also predicted that the Indian economy will decline by 5 percent in FY 2021
  • RBI Governor Shaktikanta Das said that there will be negative growth in the Indian economy this year

Rating agency Fitch Ratings has said that the Indian economy will decline by five percent in FY 2020-21 due to coronavirus. On the other hand, rating agency CRISIL has warned that the fourth recession is going to come after independence in India and it will be the worst recession ever. Earlier in April, Fitch had estimated that India’s GDP growth rate would be 0.8 percent in the current financial year.

 

What did Fitch Say

Fitch Ratings said that a strict lockdown policy has been implemented in the country due to the coronavirus. This led to a drastic decline in economic activity, which will directly affect the growth rate of gross domestic product (GDP). Earlier in April, Fitch had estimated that India’s GDP growth rate would be 0.8 percent in the current financial year. Now Fitch has reduced his estimate considerably. Fitch said that India’s GDP will fall by 5 percent in this financial year.

According to news agency PTI, rating agency Fitch Ratings said, “A very strict lockdown policy has been implemented in India. Apart from this, nationwide sanctions have been stretched much longer than expected; the figures of economic activity which are coming are very weak.”

 

This is Crisis’s Estimate

Similarly; Crisis has also predicted that the Indian economy will decline by 5 percent in FY 2021. Earlier on April 28, Crisis had said that India’s GDP will increase by 1.8 percent. But in view of the continuing lockdown and increasing cases of the corona, rating agencies are now starting to forecast negative growth in India’s GDP.

 

Reserve Bank also Accepted

Now even the Reserve Bank of India has accepted that there may be negative growth in the Indian economy in this financial year. In a press conference after the recent MPC meeting, Reserve Bank Governor Shaktikanta Das had said that there will be negative growth in the Indian economy this year.

 

Only Farming will Save

Crisis estimates that the non-agricultural economy may decline by 6 percent this year, while the agric economy will give a slight relief with a 2.5 percent growth.

According to Crisis, according to the data available in the last 69 years, there have been three economic downturns in 1958, 1966, and 1980 in India. But the reason for all the above recession was that due to inadequate monsoon rains many areas had a drought and there was a huge loss to the agricultural economy.

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