INSUBCONTINENT EXCLUSIVE:
Retail inflation data, due later in the day, is likely to have stayed above the RBI medium-term target.S-P Global Ratings said on Monday
that it was expecting India's economy to shrink by 9 per cent in the fiscal year ending March 31, 2021, larger than its previous estimate
of a 5 per cent contraction, as the country reels under the impact of the COVID-19 pandemic.The ratings firm joins a host of major banks and
ratings agencies, which have made deep cuts to their forecasts on India's economy following a 23.9 per cent contraction in April-June, as
consumer spending, private investments and exports collapsed during one of the world's strictest lockdowns.S-P's latest revision comes
three months after it made its projection on India's real GDP for fiscal 2021."While India eased lockdowns in June, we believe the
pandemic will continue to restrain economic activity As long as the virus spread remains uncontained, consumers will be cautious in going
out and spending and firms will be under strain," S-P said in a note."The potential for further support monetary support is curbed by
India's inflation worries," said Vishrut Rana, Asia-Pacific economist for S-P Global Ratings
The Reserve Bank of India has cut policy rates by 115 basis points so far this year.Retail inflation data, due later in the day, is likely
to have stayed above the Reserve Bank of India's medium-term target range in August for the fifth straight month, according to a Reuters
poll.India's high deficit also limits the scope for further fiscal stimulus, S-P added
It expects GDP growth of 6 per cent in fiscal 2022 and 6.2 per cent in fiscal 2023.Moody's on Friday said it was expecting India's real
GDP to contract by 11.5 per cent in fiscal 2020.
