In the wake of the worldwide economic shutdowns due to coronavirus outbreak, Fitch Ratings released the Global Economic Outlook on Tuesday. According to this report, India’s GDP is expected to face a contraction of 5% in FY21. Earlier, the rating agency had predicted a 0.8% growth in India’s GDP.
The sharp cut in India forecast was necessitated due to slump in economic activities and very stringent lockdown policy, the rating agency said.
The world economy is now predicted to fall by 4.6% in 2021. In late April, this forecast stod at 3.9%. With the pandemic spreading many emerging markets, excluding China have also experienced an economic shock and this will lead to a fall in output by 4.5% instead of 1.9% as predicted earlier.
“India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak,” stated Fitch Ratings’ latest GEO report.
“World GDP is now forecast to fall by 4.6 percent in 2020 compared to a decline of 3.9 percent predicted in our late-April GEO. This reflects downward revisions to the eurozone and the UK and, most significantly, to emerging markets (EM) excluding China,” said Brian Coulton, Chief Economist, Fitch Ratings.