Fitch Ratings, an American credit rating agency in its latest Global Economic Outlook(GEO)-March 2021 has revised India’s Gross Domestic Product(GDP) growth estimate to 12.8% for FY22 from 11% due to the stronger carryover effect, and better virus containment.
India’s growth forecast by Fitch:
- GDP of the fourth quarter in FY21 has surpassed its pre-pandemic level and the country is recovering faster from the COVID-19 induced recession in the second quarter of 2020.
- In manufacturing sector, the Purchasing Managers Index (PMI) remained elevated and led to more gains in February 2021.
- It predicts that RBI will not cut its policy rate and forecasts a Short-term growth outlook with a more limited decline in inflation.
Global GDP Prediction:
- It expects global GDP to expand by 6.1%in 2021, which is revised up from 5.3% in their GEO, December 2020.
- They also revise the world GDP declined by 3.4% in 2020 from their previous forecast of a 3.7% decline.
Other countries’ growth:
- US GDP growth- 6.2% in 2021 (revised up from 4.5%),
- China GDP growth – 8.4% (revised up from 8.0%)
Key Points:
i.The biggest revisions are for Turkey and India.
ii.In the manufacturing sector, the Purchasing Managers Index (PMI) remained elevated and led to more gains in February 2021.It predicts that RBI will not cut its policy rate and forecasts a Short-term growth outlook with a more limited decline in inflation.
Recent Related News:
On February 10, 2021, India Ratings and Research (Ind-Ra) Ltd estimated that India’s real Gross Domestic Product(GDP) will bounce back to 10.4% in FY22, primarily based on the base effect. The GDP growth of Q1 to Q3 of FY 21 was negative, the agency expects that the growth will be positive in Q4 at 0.3%. Earlier, Ind-Ra had projected the GDP for FY 21 as -7.8%.
About Fitch Ratings:
President– Ian Linnell
Headquarter– New York, United States
