Fitch Cuts India Growth Projection to 8% For FY22; Economy to Shrink by 5 Percent This Fiscal

Fitch Ratings on Tuesday cut India's growth forecast for 2021-22 fiscal to 8 per cent from 9.5 per cent projected last month.

It, however, retained its projection of Indian economy contracting by 5 per cent in the current fiscal.

Indian economic growth stood at an estimated 4.2 per cent in 2019-20.

In its June update of Global Economic Outlook, Fitch projected Indian economy to grow 5.5 per cent in 2022-23.

"In India, where authorities imposed one of the most stringent lockdowns globally to try to halt the spread of the virus, measures are being relaxed only very gradually; with a limited policy easing response and ongoing financial sector fragilities, we have pared our 2021 forecast to 8 per cent from 9.5 per cent in the previous GEO," Fitch said.

In May update to the oulook, Fitch had projected 9.5 per cent growth in 2021-22.

S&P has forecast a 5 per cent contraction in the fiscal year starting April, and the growth to recover to 8.5 per cent next fiscal.

Moody's expects India's real GDP to contract by 4 per cent in fiscal 2020 due to the shock from the coronavirus pandemic and related lockdown measures, followed by 8.7 per cent growth in fiscal 2021 and closer to 6 per cent thereafter.