India's GDP will de-grow 9.5% in FY21

Mumbai: Domestic rating agency Icra has revised its forecast for contraction in the country's GDP in the current fiscal to 9.5 per cent from 5 per cent earlier, as continued lockdowns in some states have affected the recovery seen in May and June.

Most of the analysts have projected the country's GDP to contract in the range of 5-6.5 per cent in this fiscal.

"We have sharply revised our forecast for the contraction in Indian GDP in FY2021 (at constant 2011-12 prices), to 9.5 per cent from our earlier assessment of 5 per cent, with the climbing Covid-19 infections resulting in a spate of localised lockdowns in some states and cities, arresting the nascent recovery that had set in during May-June 2020," the rating agency said in a report. It said the country's economy may have contracted by a sharp 25 per cent in the first quarter of FY21, and expects a shallow recovery in the subsequent quarters, with a contraction of 12.4 per cent in the second quarter of FY21 and a milder 2.3 per cent in the third quarter, followed by a growth of 1.3 per cent in the fourth quarter of FY21. Icra's principal economist Aditi Nayar said the Indian economy had started to recover from the troughs experienced in April 2020, when the lockdown was at its severest, and many sectors seemed to be adjusting to the new normal.