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Rating agency Moody’s has cut India’s gross domestic product (GDP) forecast for FY22 to 9.3 per cent from the earlier projection of 13.7 per cent. It also pointed out that a sovereign rating upgrade is unlikely in the near future. This is due to the rating agency believing that the quality of India’s growth has also declined, alongside a marked slowdown in the rate of economic expansion in recent years. Also, it has pointed out that India’s credit profile is increasingly constrained by obstacles to economic growth.

It said a high debt burden and a weak financial system remain among the primary obstacles to economic growth, with risks being exacerbated by the coronavirus pandemic. Policymaking institutions have struggled to tackle and contain these risks.

The latest cut in projections came in the wake of a severe health crisis nationwide, brought on by the second wave of the pandemic. Daily cases have remained above the 3-lakh-mark for the past 17 days in a row. However, it has raised its forecast for real GDP in FY23 to 7.9 percent as compared to 6.2 percent earlier. The long term real GDP growth has been pegged at about 6 percent.