Amid a raging second wave of COVID-19 and subsequent restrictions on business activities imposed by several states, economic recovery is beginning to lose steam and the country’s GDP growth is likely to be below nine per cent for the current fiscal, according to a survey.
At least 80 per cent of the respondents expect consumer demand for non-essential items as well as investment to be severely impacted due to the current COVID situation, the survey conducted by Care Ratings said.
“The economic recovery is beginning to lose steam with infection rates scaling record highs. Almost seven out of 10 respondents expect GDP (growth) to be below nine per cent for FY22,” it said.
According to the study, the majority of respondents expect the lockdown announced by several states will stay till May-end. Altogether, 54 per cent of the people, who participated in the survey, believe that the lockdown is a solution to the current COVID-19 situation in the country, it said. Little more than three-fourth of the respondents feel that the current lockdown is not as stringent as the restrictions imposed last year, it added.
Another rating agency CRISIL said India’s GDP growth is likely to drop to 9.8 per cent in a moderate scenario, assuming the second wave of coronavirus disease peaks by May- end. The economic growth may slip further to 8.2 per cent in the severe situation when the second wave of the pandemic peaks by June-end, it added.
Global rating agency Moody’s has also sharply trimmed its India growth forecast for FY22 to 9.3% from 13.7% estimated in February, stating that the severe second wave of coronavirus infections will “slow the near-term economic recovery and could weigh on longer-term growth dynamics”.
However, it raised the FY23 growth projection for the country to 7.9% from 6.2% anticipated earlier. Still, over the longer term, it expected growth to hover around 6%. The agency also pegged India’s real GDP contraction in FY21 at 7.2%, against 7% expected earlier.