American credit rating agency Fitch Ratings’ company India Ratings and Research cut its growth forecast for India to 0.8% in the 2020-’21 financial year as the coronavirus pandemic continues to hit investments and exports globally. This is the third update of the agency’s Global Economic Outlook forecasts in a month. It is usually done every quarter.

The ratings agency said that India’s Gross Domestic Product growth will slip to 0.8% in 2020-2021, a revision from the 2% that was projected just three weeks ago. This is in comparison to an estimated 4.9% growth in the 2019-2020 financial year. But it is expected to get better in the next fiscal as the agency projected a 6.7% growth in 2021-’22, according to PTI.

“With China and India both now expected to see sub-1% growth, we expect an outright contraction in EM [emerging markets] GDP in 2020, a development unprecedented since at least the 1980s,” the rating agency said.

A notable feature of this update of the Global Economic Outlook is sharp further downward revisions to GDP forecasts for emerging markets, the rating agency said. “Falling commodity prices, capital outflows and more-limited policy flexibility are exacerbating the impact of domestic virus-containment measures; Mexico, Brazil, Russia, South Africa and Turkey have all seen big GDP forecast adjustments,” it said.

“Fitch Ratings now expects world GDP to contract by 3.9% in 2020, a recession of unprecedented depth in the post-war period,” Brian Coulton, Chief Economist at Fitch Ratings, said. “This is twice as large as the decline anticipated in our early April GEO [Global Economic Outlook] update and would be twice as severe as the 2009 recession.”

“No country or region has been spared from the devastating economic impact of the global pandemic,” the statement added.

Earlier this month, the International Monetary Fund cut its growth projection for India to 1.9% from the earlier estimated 5.8% for the financial year 2020-2021 as the intensifying coronavirus pandemic continued to crush the global economy. With a subdued forecast, India is likely to record its worst growth performance since liberalisation in 1991, the IMF said in its latest edition of the World Economy report. But the IMF added that only India and China will see positive growth in 2020.

IMF projected India’s growth rate in 2021-2022 at 7.4%. China’s economy is likely to grow at 9.2% while the United States has been projected to grow at 4.5%.

Other agencies such as British brokerage Barclays, the Asian Development Bank, and the United States-based multinational investment bank Goldman Sachs have also predicted cuts in India’s GDP growth.

Last month, Reserve Bank of India Governor Shaktikanta Das had said the central bank will not shy away from using “any instrument” necessary to revive growth and preserve financial stability to mitigate the adverse economic impact of the coronavirus pandemic.

The number of coronavirus patients in India rose to 21,373 on Thursday morning, but the Indian Council of Medical Research said at least 21,797 people have tested positive so far. The toll increased to 681, while the number of patients who have recovered stood at 4,257.

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