New Delhi, April 23 (IANS) Fitch Ratings has reduced its economic growth forecast for India to 0.8 per cent for the current fiscal on the back of disruptions caused by the COVID-19 outbreak.
The current projection is lower than the two per cent growth that the global ratings agency had forecasted in early April.
However, for 2021-22 the economic growth forecast has been pegged at 6.7 per cent.
According to the latest Global Economic Outlook (GEO) which has been prepared in response to coronavirus-related lockdown extensions and incoming data flows, Fitch Ratings has made further large cuts in India’s and world’s GDP forecasts.
“World GDP is now expected to fall by 3.9 per cent in 2020, a recession of unprecedented depth in the post-war period,” said Brian Coulton, Chief Economist at Fitch Ratings.
“This is twice as large as the decline anticipated in our early April GEO update and would be twice as severe as the 2009 recession.”
Accordingly, the decline in GDP equates to a $2.8 trillion fall in global income levels relative to 2019 and a loss of $4.5 trillion relative to our pre-virus expectations of 2020 global GDP.
Fitch’s GEO said that no country or region has been spared from the devastating economic impact of the global pandemic.
“A notable feature of this update is sharp further downward revisions to GDP forecasts for emerging markets (EM). Falling commodity prices, capital outflows and more-limited policy flexibility are exacerbating the impact of domestic virus-containment measures; Mexico, Brazil, Russia, South Africa and Turkey have all seen big GDP forecast adjustments,” the GEO said in a statement.
“With China and India both now expected to see sub-1 per cent growth, we expect an outright contraction in EM GDP in 2020, a development unprecedented since at least the 1980s. We expect supply responses and a relaxation of lockdowns to help oil prices to recover from current lows, which are being exacerbated by storage capacity issues in the US and elsewhere.”