Fitch Ratings recently raised India’s gross domestic product (GDP) forecast to minus 9.4 per cent in this fiscal from a previously projected contraction of 10.5 per cent after the economy witnessed a sharper rebound in the second quarter. In its Global Economic Outlook, Fitch said the coronavirus recession has inflicted severe economic scarring and the country needs to repair balance sheets and increase caution about long-term planning.

“We now expect GDP to contract 9.4 per cent in the fiscal year to end March 2021 (FY21) ( 1.1 percentage point), followed by 11 per cent growth (unchanged) and 6.3 per cent growth ( 0.3pp) in the following years,” the rating agency said.

The projections compare to a GDP growth of 4.2 per cent in 2019-20 fiscal and 6.7 per cent annual expansion between 2015 and 2019.

In September, Fitch had sharply lowered its forecast for India’s GDP to a contraction of 10.5 per cent in fiscal 2020-21 versus its previous estimate of 5 per cent contraction.