India Rating-Research revises FY21 GDP growth expectation to minus 7.8 pc

India Ratings and Research on Thursday narrowed the contraction in India's FY21 gross domestic product (GDP) growth to negative 7.8 percent from a negative 11.8 percent. Accordingly, the ratings agency pointed out the easing of the Covid-19 headwinds and better-than-expected 2QFY21 GDP numbers as the reasons behind such a move.

"However, the question remains, how sustainable is the recovery witnessed in 2QFY21, as a significant part of the impetus came from the festival and pent-up demand," the ratings agency said in a report. "Although the headwinds emanating from Covid-19 related challenges are unlikely to go away till mass vaccination becomes a reality, perhaps the economic agents and economic activities not only have learnt to live with it but also are adjusting swiftly to the post-Covid-19 world," the report said.

The Ratings agency expects FY22 growth to be 9.6 percent, mainly due to the weak base of FY21.

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