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 rating 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 rating 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 learned to live with it but also are adjusting swiftly to the post-Covid-19 world,” the report further said.
According to Ind-Ra, GDP growth during 3QFY21 is expected to come in at negative 0.8 percent and 4QFY21 GDP growth to turn positive at 0.3 percent as against its earlier expectation it turning positive in 4QFY22.
Besides, the agency expects FY22 growth to be 9.6 percent, mainly due to the favorable or weak base of FY21.
