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Date - 23rd Jun 2021

Moody's Investors Service cut India's growth forecast to 9.6 percent for 2021 from a previous forecast of 13.9 percent. According to him, growth will be limited to 7% in 2022. The growth forecast was published in his report,

"India's Macroeconomics: Economic Shocks from COVID Second Wave Will Not Be As Severe as Last Year."

High-frequency economic indicators show that the second wave of COVID-19 in India hit the economy hard in April and May, according to the report. He emphasizes that as restrictions ease, economic activity in May will mean a slowdown. Accelerating vaccinations will be key to limiting economic losses through June 2021.

It also says the re-outbreak of the virus has added uncertainty to India's growth forecast for 2021. But it is likely that economic damage will remain limited between April and June.

Which states have been affected the most?

India's 10 states were hit hardest by the second wave. They accounted for about 60 percent of India's GDP before the outbreak of the pandemic. Maharashtra, Tamil Nadu, Uttar Pradesh and Karnataka are the four states that contributed the largest shares of any state in the 2019-20 fiscal years.

The Indian economy posted a 7.3% growth rate in fiscal 2020-2021 during the first wave of COVID, compared to a 4% growth rate in 2019-2020.

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