Goldman Sachs on Wednesday put out the bleakest FY21 growth forecast for India at 1.6%, down from 3.3% previously, holding that the spread of the Covid-19, announcements of a nationwide shutdown, social distancing measures and fears among consumers and businesses may lead to a significant contraction in economic activity.
So far Fitch Ratings and ICRA Ltd had pegged India’s FY21 growth at 2% while S&P and Moody’s have projected India to grow at 3.5% and 2.5% respectively.
India’s growth is estimated to have declined below 5% in FY20 from 6.1% in FY19, as domestic investment and consumption demand were under stress because of the liquidity crunch that non-banking financial companies faced and the sharp slowdown in credit growth.