India's Economy To Grow At 9.3% In FY22, Risks Persist: Moody's

Moody's said the reimposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity. However, the impact is not expected to be as severe as during the first wave.

India's economy will rebound in the current financial year to mark a growth of 9.3 per cent but the second Covid-19 wave has increased risks to the country's outlook with potential longer-term credit implications, Moody's Investors Service said on Tuesday. The economy rebounded quickly from a steep contraction in 2020, it said. But risks to India's credit profile including a persistent slowdown in growth, weak government finances and rising financial sector risks have been exacerbated by the shock of coronavirus second wave. "We expect a decline in economic activity in the April to June quarter followed by a rebound, resulting in real, inflation-adjusted GDP growth of 9.3 per cent in the fiscal year ending March 2022 (fiscal 2021) and 7.9 per cent in fiscal 2022," said Moody's. It said the reimposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity. However, the impact is not expected to be as severe as during the first wave.