Fitch Ratings has slashed India’s growth forecast to 10pc from the prior 12.8pc for the fiscal year owing to slow recovery post the second wave of COVID-19. 


The banking sector was hit the hardest by the second wave of COVID-19 as businesses and revenue generation suffered, reported Fitch.


The banking sector would increase lending to the stressed MSME sector, leading to a further rise in retail borrowings. This would pressure banks, especially those in the public sector, notes Fitch.


Fitch also reported that the second wave of COVID-19 had a less severe impact on business than the first, despite higher infection rates. 


India’s economy had contracted by 24.4pc in the June quarter last year but Fitch had previously expected a rebound to pre-pandemic levels in FY2022. 


The Reserve Bank of India cut India’s growth forecast to 9.5pc earlier and Moody’s had forecasted a growth rate of 9.3pc for FY2022. 


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