InvestorQ : Why has Fitch lowered the GDP growth of India below what the government has announced on February 28, 2020?
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Why has Fitch lowered the GDP growth of India below what the government has announced on February 28, 2020?

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Rashi Mehra answered.
1 year ago
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It is a marginal cut compared to the Indian government’s estimates. For example, Fitch has cut India’s growth forecast for 2019-20 from 5.1% to 4.9%. It has also downsized its estimates for FY20-21 growth from 5.9% to 5.4%. This is in contrast to the GOI’s estimate of 5% for the full year; which itself looks optimistic considering that Indian economy will have to grow at 5.8% in the last quarter to achieve this number. According to Fitch, the credit squeeze that started with the NBFC crisis in late 2018 continues to remain an overhang on credit off take in India. Fitch also pointed out that the spate of recent bankruptcies could renew the problem of NPAs for banks and other financial lenders. Fitch has also pointed out that some key industries like automobiles, electronics and pharmaceuticals are facing a major challenge in terms of disruption in their supply chain due to their overt dependence on China. In addition, Gross fixed growth has contracted by (-4.5%). This almost appears to be the consensus among most of the economists and rating agencies.

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