American credit rating agency Fitch Ratings inc on Wednesday reduced India's economic growth forecast to 8.4 percent for the current fiscal year ending March 31, 2022, mentioning the rebound after the second wave of COVID infections has been subdued than expected. The Agency, which had previously forecast a GDP growth of 8.7 percent in 2021-22 (April 2021 to March 2022), however, raised the economic growth projection for the next financial year (FY23) to 10.3 percent from previously predict 10 percent.
The economy had contracted by 7.3 percent in the 2020-21 fiscal as restrictions imposed to curb spread of coronavirus pummelled business activity. "India's economy staged a strong rebound in 3Q21 (July-September 2021) from the Delta variant-induced sharp contraction," Fitch said in its Global Economic Outlook (GEO).
The GDP rose a sharp 11.4 percent when compared to the preceding April-June quarter when it had fallen 12.4 percent. "However, the bounce was more subdued than we expected in our September GEO. The rebound in the services sector was weaker than expected for," Fitch said. Nevertheless, business surveys and mobility data point to activity growing strongly in 4Q21 (October-Dec 2021).