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'India Set for Slow Medium-Term Recovery’: Fitch


In India coronavirus-influenced economic destruction has been among the most severe in the world, which results in complete lockdown for a very long period. Though the numbers of deaths per million are significantly lower than in Europe and the United States, the economic impact had been much more drastic. Nearly a quarter of the country's economic activities were put to an end due to the collapse of demand.

 Recently Fitch ratings predicted India's mid-term growth rate to Slow Down to 6.5 % from FY 23 afterward. The initial rebound to 11% in FY 22 because of the lasting damage from the Corona pandemic. Pre pandemic the expectation of supply-side potential growth was 7% annually for five year period 2020 to 2025 but this recent report projected at just 5.1 % annually for the same period.



The next five years will be very crucial for the restoration of the country's health as well as the economy. A major risk to the Agencies estimates would be a slow rollout of the vaccine than expected. The likely rise in poverty due to pandemic will add hurdles in the recovery path of the economy.

India's growth performance is directly influenced by the high investment rate in driving growth in labor productivity and GDP per capita from the last 15 years. But investment has fallen sharply over the last year.



 In a commentary on the Indian economy, Fitch ratings said that a combination of supply-side scarring and demand-side constraints - such as the weak state of the financial sector - will keep the level of GDP well below its pre-pandemic path.

                                          


Comments

  1. Yashashvi yadav16/1/21 8:02 PM

    Drastic change is occur due to this coronavirus many number of peoples get in infected and get multiples damage in our economy and our health also the growth of our country is also decreases very rapidly but the vaccine is now available so the virus and the situation get under controlled but we should do not forget to use safety and use sanitize and mark for be safe and be preserved

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