India clocked 13.7% growth in the fiscal year 22, contracted 7% of this fiscal year: Moody’s

On the back of stabilization of operation and rising trust in the industry with the launch of the COVID-19 vaccine, Moody’s Investors Service said on February 25, the Indian economy is expected to post a growth of 13.7 percent in FY’22, recording a significant turnaround from a 7 percent contraction this fiscal, In November last year, Moody’s predicted that the Indian economy will contract 10.6 percent in the current fiscal year and boost to 10.8 percent in the 2021-22 fiscal year. “We predict a turnaround of 13.7 percent for the year after that, which largely represents operation normalization, a pronounced base effect. Recovery of operation strengthened by some degree of vaccination rollout and the investor trust that things are returning to normal”, In an online conference organized by Moody’s and its Indian affiliate ICRA on India Credit Outlook 2021, Moody’s Investors Service Associate Managing Director (Sovereign Risk) Gene Fang said. Mr. Fang said the implementation of reform remains a problem in India and expressed concern about revenue generation through the privatization of the CPSE announced in the budget that such one-off monetization policies are less sustainable in terms of long-term fiscal health help. ICRA Principal Economist Aditi Nayar said the Indian economy could register 0.3 percent growth in the current fiscal quarter of October-December, adding that the recession in India has ended. The Indian economy compressed this tax for two successive quarters in June and September, experiencing a recession. The contraction was 23.9% and 7.5% respectively. In the next fiscal starting April 1, ICRA expects the Indian economy to contract 7 percent in the current fiscal and expansion to recover to 10.5 percent. Mr. Nayar said that if government capital spending raises, budget proposals are enforced and vaccination campaigns are carried out, there might be an upside to growth in FY’22. The Indian economy was expected by the Economic Survey to contract 7.7 percent in the current fiscal and grow to recover to 11 percent next fiscal. Recovery of operation enhanced by some degree of vaccine roll-out and the investor trust that things are going back to normal will drive progress, he added.

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