Fitch projects Indian economy to contract 5% in FY21
- Fitch had earlier forecast growth of 0.8% for India
- Fitch said world GDP is forecast to fall by 4.6% in 2020
In the wake of coronavirus pandemic, rating agency Fitch Ratings has made further cuts to its world GDP forecasts in its latest Global Economic Outlook (GEO), released on Tuesday. The biggest forecast cut was for India where Fitch now anticipates a 5% decline in FY21 in contrast to an earlier forecast of growth of 0.8%.
The sharp cut in India forecast was necessitated due to slump in economic activities and very stringent lockdown policy, the rating agency said.
Fitch said world GDP is forecast to fall by 4.6% in 2020 as compared to a decline of 3.9% predicted in late April.
Fitch expects output in emerging markets, excluding China, to fall by 4.5% this year as against the earlier predicted fall of 1.9%.
"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 per cent in 2020 compared to a decline of 3.9 per cent 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.
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First Published:26 May 2020, 10:00 PM IST
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