Fitch slashes India's growth forecast for next fiscal to 8.5% from 10.3%
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Rating agency Fitch in its Global economic Outlook-March 2022 has slashed India's growth forecast for the next fiscal to 8.5 per cent from 10.3 per cent. The agency slashed India's growth forecast on account of sharply higher energy prices.
It mentioned that the post-COVID-19 pandemic recovery is being hit by a potentially huge global supply shock that will reduce growth and push up inflation. The war in Ukraine and economic sanctions on Russia have put global energy supplies at risk. Sanctions seem unlikely to be rescinded any time soon.
Russia supplies around 10 per cent of the world's energy, including 17 per cent of its natural gas and 12 per cent of oil. It added ‘The jump in oil and gas prices will add to industry costs and reduce consumers' real incomes...Higher energy prices are a given’.
Further, it stated with the Omicron wave subsiding quickly, containment measures have been scaled back, setting the stage for a pick-up in GDP growth momentum in the June quarter this year. It has revised upwards the GDP growth forecast for the current fiscal by 0.6 percentage points to 8.7 per cent.
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