Research reports by Goldman Sachs and Fitch Ratings on Tuesday projected that India’s economic recession in FY21 is likely to be deeper than estimated earlier due to the lack of required fiscal support, fragilities in the financial system and rising spread of deadly and highly contagious coronavirus cases stopping normalisation in economic activity.
Investment bank Goldman Sachs projects that India’s gross domestic product (GDP) is expected to shrink 14.8% during the current fiscal as compared to earlier estimate of an 11.8% contraction. Meanwhile, Fitch Ratings, slashed its growth forecast for India for FY21 to 10.5%, a figure that is more than double the estimation (5%) projected in June.
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According to the latest estimates released by Fitch and Goldman Sachs, India’s GDP projections for the current fiscal is the worst ever contraction witnessed in the history. Earlier, in FY80, India’s GDP contraction at 5.2% was the worst estimates till date.
According to Hindustan Times, in June India’s economy contracted 23.9%, reporting its steepest drop in 40 years. India’s performance was worst among G20 nations, and below expectations than predicted by most of the economists, as the nationwide lockdown induced due to Covid-19 halted the operations across all sectors as staying indoors was the only mandate.