For 2021-22, it projected the economy to clock a growth of 10.6 per cent. "Mutually reinforcing risks from deeper stresses in the economy and financial system could lead to a more severe and prolonged erosion in fiscal strength, exerting further pressure on the credit profile," said the agency, according to PTI.
"India’s credit profile increasingly constrained by low growth, high debt burden and a weak financial system."
Global rating and research houses, such as Fitch and Goldman Sachs, earlier this week cut their estimates for growth in India’s gross domestic product
(GDP) for the current fiscal 2020-21 (FY21).
While Fitch now expects the country’s GDP
to contract 10.5 per cent in FY21 versus its earlier estimate of 5 per cent contraction in this period, Goldman Sachs forecasts a sharper contraction at 14.8 per cent (-11.8 per cent forecasted earlier) in FY21 and 11.1 per cent (-9.6 per cent earlier) in calendar year (CY20).
The downward revision in India's forecast for FY21 comes on the heels of a sharp contraction in Indian economy in the April–June 2020 period, when the GDP
came in at a negative 23.9 per cent year-on-year (YoY), the worst performance in nearly four decades.