InvestorQ : Is it true that S&P Rating Agency has upgraded the growth potential for India for the fiscal year FY21?
diksha shah made post

Is it true that S&P Rating Agency has upgraded the growth potential for India for the fiscal year FY21?

Answer
image
Niti Shenoi answered.
3 months ago
Follow

S&P Global Ratings has upgraded the growth contraction in FY21 based on recent events. Here are some of the highlights of the note put out by S&P Global Ratings.

· S&P Global Ratings has raised India's growth projection for the fiscal year FY21 to -7.7% from -9%. While there will still be a contraction in growth due to the lag effect of Jun-20 quarter, the contraction would be much lesser than originally anticipated.

· S&P has also indicated that there could be more upgrades along the way if the third and the fourth quarter give some positive takeaways in terms of growth. This upgrade comes on the back of rising demand, improving output and falling COVID infection rates.

· In the note, S&P also highlighted that the current revision in growth also reflects the faster-than-expected recovery in the quarter through September. The fall in growth was much in Sep-20 quarter compared to the Jun-20 quarter.

· The subsequent year could be still better. For example, S&P Global has projected India's growth to rebound to 10% in FY22 and then stabilize after that. It may be recollected that in the Sep-20 quarter, India’s GDP fell by 7.5%; much better than the 23.9% contraction in Jun-20 quarter.

· Like most Asian economies, other Asian economies had also shown a rapid recovery and India was also performing along those lines. S&P has also lauded the resilience of supply chains of majority of Indian companies. It also added that the cost cuts undertake has left companies with enough profits to ride the next phase of growth.

1 Views