New Delhi: Credit rating agency Moody’s Investors Services lowered the country’s economic growth forecast for the current financial year 2021-22 by about four per cent to 9.3 per cent on Tuesday, compared to 13.7 per cent previously. Moody’s puts India’s sovereign rating at BAA 3 with a negative outlook. He says that bottlenecks, high debt and weak financial system have an impact on sovereign rating in the path of economic growth.
In February, the US rating agency had predicted India’s economic growth rate to be 13.7 percent for 2021-22. According to official estimates, the Indian economy has shrunk 8 per cent in FY 2020-21. Moody’s said that India is facing a fierce second wave of Kovid-19. Which can slow the near-term economic recovery and reduce the long-term growth momentum. The spurt in new cases of corona infection put a lot of pressure on India’s healthcare system, which reduced the medical supplies in hospitals.
He said that the second wave of Corona infection would hamper economic recovery and this increased the risk for a longer period. Economic activity will be curbed by the lockdown imposed due to Corona. Moody’s, however, expected the second wave of Corona infection to be less severe than the first wave. He said that during the first wave, a nationwide lockdown was imposed for several months, while this time there are restrictions on small scale and short duration. Traders and consumers have also become accustomed to running economic operations activities along with the epidemic.