S P may revise GDP estimate

The second wave brings in uncertainty and a drawn-out COVID outbreak will impede India’s recovery, it said.

“This may prompt us to revise our base-case assumption of 11 per cent growth over fiscal 2021-2022, particularly if the government is forced to reimpose broad containment measures,” S&P said in a statement.

Last week another global rating agency Fitch had projected India’s economic growth in current fiscal at 12.8 per cent, while Moody’s Investors Service had earlier this month said that the second wave of COVID infections presents a risk to India’s growth forecast, but a double digit GDP growth is likely in 2021 given the low level of activity last year.

As per official estimates, Indian economy contracted 8 per cent in the 2020-21 fiscal, which ended March 31, 2021.

S&P said the country already faces a permanent loss of output versus its pre-pandemic path, suggesting a long-term production deficit equivalent to about 10 per cent of GDP, it added.