Rating agency Standard & Poor is likely to revise its ‘base case assumption’ of India’s growth rate of 11 percent during the fiscal year 2020-21 if wider measures to contain the pandemic are re-imposed, the agency said in a report on Thursday, April 29.
The rating agency said that the second wave of infection, worse than last year’s wave, could impede India’s economic recovery and expose other nations to further outbreaks.
India's healthcare system has been overwhelmed, with the world's second most populous country reporting more than 300,000 new Covid-19 cases daily over the past six days and the number of dead is set to cross 200,000.
In addition to the substantial loss of life and significant humanitarian concerns, S&P Global Ratings believes the outbreak poses downside risks to GDP and heightens the possibility of business disruptions.
The rating agency noted that the pace and scale of recovery from the second wave of Covid-19 infections will have implications for India's sovereign credit rating. Currently, S&P’s India rating is “BBB-”, just one notch above junk.