S&P Global Ratings on December 15, raised India's 2020-21 Gross Domestic Product (GDP) forecast to a contraction of 7.7 percent, as against -9 percent projected earlier.
S&P Global did not change its projection that the Indian economy would grow 10 percent in FY22. The revision in growth forecast reflects a faster-than-expected recovery in the quarter through September, the rating agency said.
"Rising demand and falling infection rates have tempered our expectation of COVID's hit on the Indian economy. S&P Global Ratings has revised real GDP growth to negative 7.7 percent for the year ending March 2021, from negative 9 percent previously," S&P said in a statement.
India's economy plunged 23.9 percent in the first quarter of FY21 due to the impact of the COVID-19 pandemic. In Q2FY21, there was slight recovery, with GDP contracting 7.5 percent.
India is in technical recession, but macro-economic indicators have seen an uptick after resumption of manufacturing and other economic activity.
"It is no surprise that India is following the path of most economies across Asia-Pacific in experiencing a faster-than-expected recovery in manufacturing production," S&P Global Ratings Asia-Pacific chief economist Shaun Roache said.
Fitch Ratings, too, had on December 8 revised India's FY21 GDP forecast upwards to -9.4 percent from an earlier estimate of -10.5 percent.