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Care Ratings revises India's GDP growth forecast to 10.2% for current fiscal
Apr-22-2021

With economic activities getting affected across the India due to curbs imposed by states amid surge in COVID-19 cases, Care Ratings in its latest report has revised down its forecast for gross domestic product (GDP) growth to 10.2 per cent for current financial year (FY22) from earlier projection of 10.7-10.9 per cent. This is the third revision by the rating agency in the last one month.

It said ‘we have revised our forecast for GDP growth for FY22 as the underlying conditions have changed rapidly in the last 30 days or so. It stands now at 10.2 per cent.’ On March 24, 2021, the agency had projected GDP growth between 11-11.2 per cent based on GVA (gross value added) growth of 10.2 per cent. It mentioned the spread of the virus in Maharashtra had led to the announcement of a lockdown by the state government which began in a less stringent manner from the first week of April. Factoring the potential loss of economic output due to the restrictions in the state, the agency, on April 5, lowered its GDP forecast for the current fiscal year to 10.7-10.9 per cent.

It added but the lockdown was made more obtrusive to business activity by April 20, with more stringency expected for the forthcoming fortnight. Further, the spread of the virus to other states has caused similar actions by governments which have ranged from night curfews and weekend lockdowns to full lockdowns. The report said two events in the country -- state elections and Kumbh Mela -- have seen millions of people coming together with social distancing norms not being followed. It said this has potential to spread the virus at an exponential rate throughout the country and several states have announced measures to test people returning from the pilgrimage.

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