Fitch Ratings recently slashed India's gross domestic product (GDP) growth projections in its Global Economic Outlook to 0.8 per cent in the current fiscal compared to an estimated 4.9 per cent growth in the previous fiscal, saying an unparalleled global recession is under way due to disruptions caused by the COVID-19 outbreak and the resultant lockdown.

Growth is, however, expected to rebound to 6.7 per cent in fiscal 2021-22. The rating agency predicted two consecutive quarters of contraction or negative year-on-year (YoY) growth in current fiscal: April-June and July-September. This compares to 4.4 per cent estimated growth in January-March. Growth is expected to rebound to 1.4 per cent in the last quarter of calendar year 2020, a news agency cited the rating agency as saying.

Fitch said the slump in growth in this fiscal is mainly due to a projected fall in consumer spending to just 0.3 per cent in the fiscal from 5.5 per cent a year back and a 3.5 per cent contraction in fixed investment.

World GDP is now expected to fall by 3.9 per cent in 2020, a recession of unprecedented depth in the post-war period, said Fitch Ratings chief economist Brian Coulton. This would be twice as severe as the 2009 recession. The GDP decline equates to a $2.8 trillion fall in global income levels relative to 2019 and a loss of $4.5 trillion relative to pre-virus expectations of 2020 global GDP.

No country or region has been spared from the devastating economic impact of the global pandemic, the rating agency said. Falling commodity prices, capital outflows and more-limited policy flexibility are exacerbating the impact of domestic virus-containment measures; Mexico, Brazil, Russia, South Africa and Turkey have all seen big GDP forecast adjustments.

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