ECONOMY TO GROW 9.3% IN FY22, 2ND COVID WAVE RAISES RISKS: MOODY’S

Indian economy would rebound in the current fiscal ending March 2022 and clock a growth of 9.3 per cent, but a severe second Covid wave has increased risks to India’s credit profile and rated entities, Moody’s Investors Service said on Tuesday.

Moody’s, which has a ‘Baa3’ rating on India with a negative outlook, said it expects a decline in economic activity in the June quarter due to reimposition of lockdown measures along with behavioural changes on fear of contagion.

“India’s economy rebounded quickly from a steep contraction in 2020, but a severe second wave of the coronavirus has increased risks to the outlook with potential longer-term credit implications. Risks to India’s credit profile, including a persistent slowdown in growth, weak government finances and rising financial sector risks, have been exacerbated by the shock,” Moody’s said.

The Indian economy contracted by 7.3 per cent in fiscal 2020-21 as the country battled the first wave of Covid, as against a 4 per cent growth in 2019-20.