New Delhi: Amid the rising concerns over state of economy, the S&P Global Ratings on Monday cut down its growth forecast for Indian to (-) 9% from (-) 5 percent for the fiscal year 2020-21.
The rating agency said that rising Covid-19 cases will keep private spending and investment lower for longer.
“One factor holding back private economic activity is the continued escalation of the Covid-19,” said Vishrut Rana, Asia Pacific Economist for S&P Global Ratings.
“While India eased lockdowns in June, we believe the pandemic will continue to restrain economic activity,” said S&P.
New Coronavirus cases in India are constantly increasing. From 70,000 per day figures in August, it is now reported over 90,000 in September 11.
“As long as the virus spread remains uncontained, consumers will be cautious in going out and spending and firms will be under strain”, it said.
S&P had earlier forecast India”s economic contraction at 5 per cent. It said the 23.9 per cent contraction in the April-June quarter was larger than expected.
S&P said that industrial activity is recovering faster than services. However, high frequency indicators show that growth for the June to September quarter will be negative year on year.
Last week, two other global rating agencies Moody”s and Fitch projected Indian economy to contract 11.5 per cent and 10.5 per cent respectively in the current fiscal. However, Goldman Sachs has estimated the contraction at 14.8 per cent.
