India GDP Will Rebound to 8.5% in FY22

India GDP Will Rebound to 8.5% in FY22
11/06/2020 , by , in News/Views

Standard & Poor’s (S&P) Global Ratings said it sees strong recovery from India after deep contraction in FY21 and that the GDP growth in FY22 might be 8.5%.

The ratings agency affirmed ‘BBB-‘ rating on India while keeping outlook ‘stable’. It expects to maintain sound net external position and the ‘stable’ outlook assumes marked fall in India’s fiscal gap post FY21. However, S&P said weak financial sector and rigid labour markets could hamper India’s recovery if not addressed.

The ratings agency said it’s tough for the government to implement new revenue generating steps amid pandemic and it sees India’s FY21 fiscal deficit at 11% of GDP. Apart from S&P, Fitch Ratings also expects to see Indian economy improving substantially in FY22. After a contraction in the current financial year, India’s economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said.

S&P said the proposed LIC divestment is key to India consolidating its fiscal position post FY21. It expects India’s fiscal gap to “fall meaningfully” in FY22 and it also expects RBI to continue to achieve its inflation target.

Apart from S&P, Fitch Ratings also expects to see Indian economy improving substantially in FY22. After a contraction in the current financial year, India’s economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health

About Realty Plus

Loading...