Moneycontrol PRO
Upcoming Webinar:Innovate Your Future at India Inc. on the Move on August 26 and 27, 2021 at 10am, with Rockwell Automation

S&P cuts India FY21 growth forecast to 1.8%; expects growth to recover to 7.5% in FY22

The agency assumes the recovery from the pandemic to be "flattish U-shape with activity returning to pre-outbreak levels, if at all, in 2023.

April 17, 2020 / 09:15 PM IST

S&P Global Ratings on Friday slashed India growth forecast for the current fiscal to 1.8 percent, from 3.5 percent estimated earlier, on account of the lockdown to contain COVID-19 pandemic. The US-based rating agency expects growth to significantly recover to 7.5 percent in 2021-22 fiscal.

S&P had in March cut India growth forecast to 3.5 percent for 2020-21 fiscal, from 5.2 percent projected earlier.

"We assume that the first-wave of community transmission peaked in March in China and will peak in April for most other economies in the region. In some emerging markets, including India and Indonesia, a peak in reported cases is assumed to come somewhat later, perhaps early in the third quarter," S&P said.

S&P revised Asia-Pacific growth in 2020 to 0.3 percent with China at 1.2 percent, India at 1.8 percent, and Japan at -3.6 percent.

The agency assumes the recovery from the pandemic to be "flattish U-shape with activity returning to pre-outbreak levels, if at all, in 2023. If unemployment surges, we may be facing an elongated L-shape, it added.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

S&P joins the other international agencies in cutting India growth forecast over the concerns about the fallout of COVID-19 pandemic.

Fitch has projected India's GDP to grow at 2 percent this fiscal--  the slowest since the economy was liberalised 30 years back.

The International Monetary Fund (IMF) has slashed India's GDP growth projection to 1.9 percent in 2020 from 5.8 percent estimated in January, as the global economy hits the worst recession since the Great Depression in the 1930s due to the raging coronavirus pandemic.

Similarly, World Bank has estimated India's economy to grow between 1.5 to 2.8 percent in the 2020-21 - the worst growth performance since the 1991.

The Asian Development Bank (ADB) sees India's economic growth slipping to 4 percent in the current fiscal (April 2020 to March 2021), while S&P Global Ratings has lowered its GDP growth forecast for the country to 3.5 percent.

Moody's Investors Service has also slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 percent.

These growth estimates compare to an estimated 5 percent growth rate in 2019-20 fiscal that ended on March 31. Indian economy also grew by 5 percent in 2019 calendar year.

Follow our full coverage of the coronavirus pandemic here.
PTI
first published: Apr 17, 2020 09:10 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark