Global Ratings predict India’s economy to contract by 5 per cent this fiscal

Global Ratings predict India’s At a time when the world is fighting the COVID-19 pandemic, India is facing a serious issue on the Economy front as the growth is likely to contract by 5 per cent this financial year. In its report, Global Ratings predict India’s highlighted India’s inefficiency in containing the Corona virus Pandemic, a weak policy response and underlying vulnerabilities, especially across the financial Sector.

India’s economy

The report also predicted the region & economy to shrink by 1.3 per cent in 2020, but grow by 6.9

Per cent in 2021.

If this turns out to be true, the Indian economy will face a loss of approximately USD 3 trillion over

These two years.

Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings, is also expecting balance-sheet

recession.

The downturn caused by COVID-19 did not start as a balance-sheet recession but may end up as

one, & Roache said. & quote; this means less investment, a slower recovery, and a permanent hit to the

Economy that will last even after a vaccine is found. & quote;

Because of the COVID-19 outbreak, the activities suddenly stopped. In order to prevent a collapse,

Policy makers, assisted by banks, have offered immense financial support to firms and households.

Banks may lend less than they normally would in a recovery to focus on the overhang from the

epidemic. While the demand is improving, private companies might prefer to stabilize debt rather

then ramp up spending on new investments.

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