S&P Global Ratings, the largest of the Big Three credit-rating agencies, on Friday said India's credit rating would be retained at the current level for the next two years, and the country will see a slightly faster pace of growth in the next couple of years that will support its sovereign rating.
It, however, said that the second wave of COVID may derail a strong recovery in the Indian economy, but its economic impact would be less than that of last year. Indian economy contracted 8percent in the fiscal ended March 2021. S&P had in March projected the Indian economy growing by 11 percent in the current fiscal ending March 2022.
In its report earlier this week, S&P said with the rising COVID infection, it saw GDP growth rate dropping to 9.8percent under the 'moderate' scenario, where it estimates infections to peak in May. Growth could fall to as low as 8.2percent in a 'severe' scenario in whichcases would likely peakonly inlate June, as per S&P.
Speaking at a webinar on 'What A Drawn Out Second COVID Wave Means For India', S&P Global Ratings Director Andrew Wood said in the 'moderate' downside scenario there would not be any major impact on the government's fiscal position. There could be upside pressure on general government fiscal deficit forecast of 11percent as revenue generation would be weaker, but debt stock will remain roughly stable just above 90percent of GDP, Wood added.
In the 'severe' scenario, there could be more additional fiscal spending from the govt and revenue growth would be weaker. This would mean that debt stock would stabilise only in the next financial year, Wood noted.
RBI allows re-opening of one-time restructuring individuals and MSMEs till Sept 30
Sikander Kalal Khan Gets Around Being The Most Successful Businessman In The Present Times
Second threat of Covid-19 will dampen India Inc's recovery: ICRA Report