S&P slashes India's GDP growth forecast to 9.8% for FY22

New Delhi: S&P Global Ratings slashed India's GDP growth forecast for the current financial year to 9.8 per cent saying the second COVID wave may derail a budding recovery in the economy and credit conditions.

The U.S-based rating agency in March had a 11 per cent GDP growth forecast for India for the April 2021-March 2022 fiscal, on account of a fast economic reopening and fiscal stimulus.

S&P, which currently has a 'BBB-' rating on India with a stable outlook, said the depth of the Indian economy's deceleration will determine the hit on its sovereign credit profile.

The Indian government's fiscal position is already stretched.

The general government deficit was about 14 per cent of GDP in fiscal 2021, with net debt stock of just over 90 per cent of GDP.