India’s Economy Projected to Contract by 9 Percent This Current Fiscal Year

India’s Economy Projected to Contract by 9 Percent This Current Fiscal Year

As rising Covid-19 cases in India will keep private spending and investment lower for longer, S&P Global Ratings now expects the country's economy to contract by nine percent in the current fiscal year, which ends March 31, 2021.

S&P is the latest among several global rating agencies and analysts to project a deeper contraction and gloomier prospects for Asia's third-largest economy even as American investment bank Goldman Sachs and Japanese research firm Nomura voiced optimism for a recovery in 2021 "earlier than otherwise predicted by economists".

"Our previous forecast put the economic hit from Covid at 5.0 per cent," S&P said. "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.

India's economy shrank 23.9 per cent year over year