S&P Global Ratings expects a 1.2 percent drop in the gross domestic product (GDP) due to the COVID-19 second wave in a moderate scenario, Vishrut Rana, an economist at the global rating agency told CNBC-TV18 on Friday.
S&P has said that the second COVID wave in India could derail the budding recovery. In a moderate case scenario, they assume a 1.2 percentage point hit to India’s GDP in FY22 and in a severe case, the damage could be as high as causing a 2.8 percentage point hit.
“We anticipate that the effect of the upcoming pandemic related economic slowdown is going to be much less severe compared with last year and this is reflected in our numbers as we see 1.2 percentage point drop in the moderate scenario – that would not count for us as being extremely severe,” he said.
“As the peak draws out we move towards a more severe scenario outcome where we could see significantly escalated impact on GDP growth,” said Rana.
On full-year number, he said, “At the moment we are working with full-year growth for FY21 at about minus 8 percent. This number could go as high as minus 7.4 percent in which case that would have noticeable base effects on FY21-22 numbers.”
Watch the video for the full interview