Fitch Ratings Predicts 5.1% Indian Growth Forecast for FY21 amidst Coronavirus Outbreak
Bengaluru, India – 20 March, 2020: Fitch Ratings Inc – an American credit rating agency and one among the three top-rated credit rating agencies in the world recently published its Global Economic Output in 2020. In the report, Fitch said that the number of people affected by Coronavirus will keep on increasing in the coming weeks and that the pandemic will remain contained.
Fitch Ratings on Friday cut India’s growth rate to 5.1 percent for the Financial Year of 2020-21. According to Fitch, the Coronavirus outbreak is likely to stunt global investments and exports.
Before the virus turned into a full-fledged pandemic, Fitch rating had predicted India’s growth rate to be around 6.5 percent for the Financial Year 2020-21. "Supply-chain disruptions are expected to hit business investment and exports. We see GDP growth to remain broadly steady at 5.1 percent in the fiscal year 2020-2021 following growth of 5.0 percent in 2019-2020," Fitch said.
The outbreak of the virus is hitting sentiments, while local governments throughout the world have ditched out measures to contain the spread of the virus by closing schools, cinema halls, sporting events, and any public gathering places. Indian manufacturers are heavily dependent on China for the procurement of key intermediary inputs and equipments. This is especially true for the electronic and machinery industrial sectors, Fitch further added.
According to Fitch, the fragile financial system will undermine the sentiment and domestic spending. The financial system as a whole is burdened with loose balance sheets that are going to repel any credit and growth, despite dedicated efforts by policymakers.
The WHO has declared the Coronavirus as a global pandemic as over 2 lakh people have been infected by the COVID-19 virus causing widespread panic and anxiety. So far the Coronavirus outbreak has claimed over 9000 lives in the world. In India, 195 cases have been reported as of today with the virus claiming a total of 4 deaths.