Reduction in economic growth rate estimates again

Mumbai, Ta. 17 July 2020, Friday

As the number of people infected with the coronavirus in the country increases, so does the economic impact, and many states are turning to lockdowns in their various areas. The country's economic growth rate is also expected to slow down as a result of the lockdown in India as well as abroad and fears of a second wave of Corona.

Credit rating agency ICRA has slashed the country's economic growth rate from 5.5 per cent in the current financial year 2020-21, which it had earlier projected to decline to 5 per cent. The increase in Corona's case is having an impact on the economy as various states re-impose lockdowns in their areas, ICRA said, citing lower estimates.

May-June saw economic recovery in the country, but it has been hampered again. Among the various rating agencies, ICRA is the only one that has posted such a high rating. The impact on the economy of urban areas could be offset by some of the rural recovery. Following good monsoon in the country this year, agricultural development and rural consumption are expected to remain strong.

Earlier, estimates from other well-known agencies showed that most of the agencies had expected the economic growth rate to fall between 7.50 per cent and 5 per cent, although their estimates were likely to change.