S&P Cuts India's 2021-22 Growth Forecast to 9.5%

GDP growth in the current fiscal was estimated to be in double digits initially, but after a severe second wave, many agencies cut growth projections.

S&P Global Ratings on Thursday cut India's growth forecast for the current fiscal to 9.5 per cent, from 11 per cent earlier, and warned of risk to the outlook from further waves of COVID pandemic. The agency lowered the growth outlook saying that a severe second COVID-19 outbreak in April and May led to lockdowns imposed by states and sharp contraction in economic activity. “We forecast growth of 9.5 per cent this fiscal year from our March forecast of 11 per cent,” S&P said.Stating that permanent damage to private and public sector balance sheets will constrain growth over the next couple of years, it projected India's growth at 7.8 per cent in the next fiscal ending March 31, 2023. “Further pandemic waves are a risk to the outlook given that only about 15 per cent of the population has received at least one vaccine dose so far, although vaccine supplies are expected to ramp up,” S&P said.