Rating agency Fitch today said the second wave of covid 19 infection poses increased risks for India’s fragile economic recovery and it’s banks. Fitch forecasts Indian real GDP growth at 12.8% for the Financial year ending March2022 (FY22).
Fitch expected the worse environment for Indian banking sector in 2021, which also affect the business and economic activities too. India’s active covid infection have been increasing rapidly which also increase the renewed risks to the forecast. This second wave could dent the sluggish recovery in consumer and corporate confidence , further supress banks prospects for new business.
Fitch Ratings is an international credit rating agency based out of New York city and London. Fitch bases the ratings on factors such as what kind of debt a company holds and how sensitive it is to systemic changes like interest rates.
However,indias large population in a fast and effective way will be important to avoid repeated disruption. Fitch said a speedy economic recovery is critical for the sectors to rebound even though it expects a challenging landscape for Indian banks in 2021.