On Friday, S&P Global Ratings slashed India's growth forecast for the current fiscal year to 1.8 percent, from its earlier estimate of 3.5 percent, on account of the nationwide lockdown imposed to contain COVID-19 pandemic. However, the US-based rating agency expects significant growth recovery at 7.5 percent in the next financial year.
Previously, in March, S&P had cut India's growth forecast to 3.5 percent for 2020-21, from 5.2 percent projected earlier.
"We assume that the first-wave of community transmission peaked in March in China and will peak in April for most other economies in the region. In some emerging markets, including India and Indonesia, a peak in reported cases is assumed to come somewhat later, perhaps early in the third quarter," S&P said.
The agency also revised Asia-Pacific's growth for 2020 to 0.3 percent with China expanding at 1.2 percent, India at 1.8 percent, and Japan contracting by -3.6 percent.
The agency assumes the recovery from the pandemic to be "flattish U-shape with activity returning to pre-outbreak levels, if at all, in 2023. If unemployment surges, we may be facing an elongated L-shape," it added.
S&P joins the other international agencies in cutting India growth forecast over the concerns about the fallout of COVID-19 pandemic.
In comparison, India's economy has been estimated to have seen a growth of 5 percent in the financial year 2019-20 fiscal as per government's GDP estimates.