Fitch Ratings on Thursday downgraded India’s economic growth forecast for current fiscal year 2020-21 to 0.8 percent from 1.8 percent estimated barely a few days ago, indicating drop in consumer spending and fixed investment due to the extension of coronavirus lockdown and disruption in economic activities.
On April 20, Fitch had predicted a 1.8 percent GDP growth for India in financial year 2021.
According to Fitch’s global economic outlook released on Thursday, India’s gross domestic product (GDP) growth will drop to 0.8 percent in FY21 in comparison to an estimated 4.9 percent growth in FY20.
The decline in GDP growth was accredited to a projected drop in consumer spending to just 0.3 percent in FY21 from 5.5 percent a year ago and a 3.5 percent contraction in fixed investment.
The agency has projected a positive year-on-year growth for first and last quarter of 2020 calendar year, while depressing growth for the second and third quarter of the current calendar year.