The coronavirus pandemic created a lot of challenges for many countries and India is not an exception. Unfortunately, the country has one of the highest number of coronavirus cases not only in the region but around the world as well. Currently, India has the second-highest number of cases after the U.S. This fact underlines the severity of the problem. The country’s government is trying to minimize the damage caused by the pandemic. Nevertheless, the state of the local economy is far from being ideal.
According to S&P Global Ratings, India’s economy is expected to shrink by 9% in the fiscal year ending March 31, 2021. The previous forecast was 5%. However, S&P Global Ratings released the latest information on Monday.
It is not surprising that an American credit rating agency decided to update the information, as the country is struggling to deal with the impact of the coronavirus pandemic. Moreover, several major banks, as well as rating agencies, also made deep cuts to their forecasts on India’s economy. It makes sense, the country’s economy contracted by 23.9% in April-June. Importantly, consumer spending, private investments, and exports collapsed during one of the world’s strictest lockdowns.
The economy of India and main challenges
Interestingly, S&P’s latest revision comes three months after it made its projection regarding India’s real gross domestic product (GDP) for fiscal 2021.
The country eased lockdowns in June. However, the coronavirus pandemic will continue to influence economic activity. The virus continues to spread in the country. Consumers will be cautious when it comes to visiting various places. Also, the companies are struggling to adapt to the everchanging environment.
The coronavirus pandemic is a serious challenge for the country and the whole world. As can be seen from the information stated above, the pandemic in India is far from being over. The top priority is to get the virus under control, while simultaneously supporting the country’s economy.