Fitch Ratings
Earlier, Fitch Ratings had projected India's GDP to contract 5 per cent this financial year.Reuters

Fitch on Tuesday, September 8, revised India's gross domestic product for the current financial year 2020-21 (FY21) to a contraction of 10.5 per cent from a contraction of 5 per cent even as it has revised its global GDP estimates up from a contraction of 4.6 per cent to a contraction of 4.4 per cent.

India recorded one of the sharpest GDP contractions in the world in April-June.

The Indian economy contracted by nearly 24 percent in the second quarter amid the imposition of one of the most stringent global nationwide lockdown to curb the spread of the Covid-19 pandemic that wiped out jobs and businesses.

India's GDP shrank was the worst among the world's top economies, with the American economy shrinking 9.5 percent in the same quarter and Japan's 7.6 percent.

'GDP should rebound strongly in 3Q20'

"GDP should rebound strongly in 3Q20 (October-December) amid a re-opening of the economy, but there are signs that the recovery has been sluggish and uneven," Fitch Ratings said.

"We have slashed our GDP forecast for this fiscal year to (-) 10.5 per cent, a huge revision of (-) 5pp compared to the June Global Economic Outlook (GEO)," it added.

Earlier, the rating agency had projected India's GDP to contract 5 per cent this financial year.

(With agency inputs)