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.
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.