Moody’s Investors Service has lowered India’s 2021 growth forecast to 9.6pc from 13.9pc previously.
According to media reports, the rating agency predicted a 7pc growth for 2022. The agency had forecast a 9.3pc growth for the ongoing fiscal but the surge in COVID-19 infections damaged India’s credit profile.
The lowered estimate is based on April-May 2021 economic indicators when COVID-19’s second wave gripped the nation. In 2021, the economic damage will be restricted to the April-June quarter as lockdown restrictions are being lifted, the report stated.
Severe lockdown measures during the second wave of the pandemic affected the economic activity of major Indian states that make up 60pc of the country’s GDP. Four out of these 10 states – Uttar Pradesh, Karnataka, Tamil Nadu, and Maharashtra contributed the most to the Indian economy in FY20.
The rating agency predicted a softer effect of the second wave on the economy than the first wave last year, depending on vaccine accessibility and recovery durability.
Around 16pc of India’s population has been vaccinated till June third week, though only 3.6pc of these people have received both doses.
During the first COVID-19 wave, in the prior fiscal, the Indian economy contracted 7.3pc from a year ago.