S&P Cuts India’s Growth Forecast to 9.5%

Global rating agency, S&P, has cut India’s growth forecast for fiscal year 2021-2022 to 9.5 per cent. Earlier, it was kept at 11 per cent.


  • Rating agency has warned of risk to the growth rate from upcoming waves of COVID-19 pandemic.
  • S&P lowered growth projecting because lockdown, induced as a result of severe second COVID-19 outbreak in April and May, led to sharp contraction in economic activity.
  • According to S&P, permanent damage to private and public sector balance sheets will constrain growth for some years.
  • It has projected India’s growth at 7.8 per cent for fiscal year 2022-2023.
  • Indian economy contracted by 7.3 per cent in 2020-21 amid first wave of COVID-19, as against 4 per cent growth in 2019-20.
  • S&P highlights, households are running down saving buffers to support consumption. After economy will open, desire to rebuild saving will hold back spending.

Further Risks

Further covid-19 pandemic waves are a risk for the growth as only about 15 per cent of the India’s population has received one vaccine dose so far.

GDP growth projection by other agencies

GDP growth in fiscal year 2021-2022 was estimated to be in double digits earlier. But a severe second wave of pandemic has made various agencies to cut growth projections. RBI has reduced India’s growth forecast to 9.5 per cent for 2021-2022 from earlier estimate of 10.5 per cent. Moody’s has projected India’s growth to 9.3 per cent for 2021-22. World Bank had also reduced GDP growth forecast to 8.3 per cent from 10.1 % for same period.


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