Moody's: India's GDP to contract 11.5% in FY2021

India's Gross Domestic Product (GDP) growth rate to contract 11.5% for the financial year 2020-21 (FY21), from -4% estimated earlier, said Moody’s Investors Services in its latest report.

Key takeaways

“India's credit profile is increasingly constrained by low growth, high debt burden and a weak financial system.”

“These risks have been exacerbated by the coronavirus pandemic.”

“It added that 'mutually reinforcing risks from deeper stresses in the economy and financial system could lead to more severe and prolonged erosion in fiscal strength, exerting further pressure on the credit profile.”

“India's policy-making institutions have struggled to mitigate the risks worsened by the coronavirus pandemic. However, for 2021-22, it projected the economy to clock a growth of 10.6% on the back of a strong base effect.“

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