Crisil has cut India’s GDP growth rate forecast for FY21 citing financial sector stress and COVID-19 impact.
Crisil, while observing that domestic consumption demand may take some hit, said it was too early for it to get reflected in data.
“Currently, the other downside to growth is also due to the financial sector stress now percolating to private sector banks. In view of this, Crisil has cut its base-case GDP growth forecast for fiscal 2021 to 5.2%, from 5.7% announced recently,” it said, adding the forecast will be reassessed continuously as new information becomes available.
Crisil said a serious downside to the base case can emerge from two developments, one, the pandemic is not contained by April-June 2020 globally, and makes the global slowdown more severe.
“And two, it spreads rapidly in India, affecting domestic consumption, investment, and production. These would further hurt confidence and the financial markets,” it added.
