Economy to suffer lasting damage due to Covid, post strong rebound: Fitch

Medium-term growth to slow around 6.5 per cent a year over FY23 to FY26

The Indian economy will suffer “lasting damage” from the Covid-19 crisis, after a strong rebound in FY22, with its growth slowing to about 6.5 per cent a year over FY23 to FY26, according to Fitch Ratings. 

This would be due to a combination of supply-side scarring and demand-side constraints such as the weak state of the financial sector that will keep India’s GDP well below its pre-pandemic path, a note by the ratings agency said.

The Covid-19 induced recession in India has been among the most severe in the world due to a stringent lockdown and limited direct fiscal support.