India growth forecast reduced to 5.1% for FY21 by Fitch
Published On: Friday, March 20, 2020 | By: Team KnowMyStock
In its Global Economic Outlook 2020, Fitch said the number of people affected by coronavirus will keep rising in the coming weeks but that the outbreak will remain contained. However, there are downside risks to this situation. Fitch in December 2019 projected India's growth at 5.6 percent for 2020-21 and 6.5 percent in the following year. "Supply-chain disruptions are expected to hit investments and exports. We see GDP growth to remain broadly steady at 5.1 percent in the fiscal year 2020-2021 following growth of 5.0 percent in 2019-2020," Fitch said. For 2021-22, Fitch projected India's growth to be 6.4 percent.
"The outbreak of the virus is hitting sentiment, while local governments have taken measures to contain the spread of the virus,by closing schools, cinemas and theatres. While India's linkages with China in trade,tourism etc. are modest, manufacturers in India are heavily reliant on key Chinese intermediate inputs especially of electronics and machinery and equipment," Fitch said.
"Fragilities in the financial system will further undermine sentiment and domestic spending. The overall financial system remains burdened with weak balance sheets, which will limit any upside to credit and growth despite policymakers' efforts in recent months to ease stresses, Fitch added.
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