Global rating agency Moody's has said India's economy will shrink by 7 per cent in FY21 and revised India's growth estimate for the next financial year 2021-22 to 13.7 per cent from 10.08 per cent earlier. The agency in its earlier estimates had predicted India's GDP to shrink 10.6 per cent in the current financial year.
In its 'Global Macro Outlook 2021-22 (February 2021 Update)', Moody's said India's Economy has rebounded quickly from one of the world's longest and most stringent lockdowns, which also came with the steepest fall in GDP in the second quarter of 2020.
"Aggregate Economic activity is estimated to have mostly recovered to the pre-pandemic-level by the end of 2020, resulting in a significant carry-over and, hence, an upward revision to our growth projection for 2021," the ratings agency said.
Moody's Investors Service Associate Managing Director (Sovereign Risk) Gene Fang told PTI that "our current expectation is that in the current fiscal ending March 2021, the economy would contract 7 per cent... We expect a rebound of 13.7 per cent growth in the next fiscal on normalisation of activity and base effects."
The government will release the GDP numbers for the October-December quarter of the current fiscal on Friday. Many agencies are expecting the economy to record positive growth in the third quarter of the financial year.
DBS Bank, in its latest report on Wednesday, said India's GDP may turn positive at 1.3 per cent in the third quarter of 2020-21. The Bank has attributed the positive growth to falling Covid cases and increase in public spending. It estimated the full-year growth in real terms at a negative 6.8 per cent.
India had recorded a de-growth of 24 per cent and 7.5 per cent in GDP in first and second quarters ended June and September 2020, respectively, as the government enforced one of the strictest lockdowns across the country amid coronavirus.
The Economic Survey 2020-21 has projected the economy to grow 11 per cent in the next fiscal beginning April 1, a shade higher than the RBI's projection of 10.5 per cent. The International Monetary Fund (IMF) expects India to grow at 11.5 per cent in the year 2021.