Fitch Ratings on Tuesday forecast the Indian economy to contract 5 percent in the current fiscal on account of the slump in economic activities following a “very severe” lockdown that has lasted much longer than expected.
In its Global Economic Outlook (GEO) for May, Fitch projected growth to rebound to 9.5 percent in 2021-22 and an estimated 3.9 percent growth in 2019-20.
The forecast of 5 percent contraction is a sharp decline from 0.8 percent growth projected by the global rating agency in late April.
“The biggest forecast cut was to India where we now anticipate a 5 percent decline in the current financial year (ending March 2021) in contrast to an earlier forecast of growth of 0.8 percent. India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak,” Fitch said.