New Delhi, Sep 11 (TIWN) Global credit rating agency Fitch on Tuesday slashed its FY-21 GDP growth forecast for India further downward to (-) 10.5 per cent from (-) 5 per cent.

The downward revision in India's forecast for FY21 comes on the heels of a sharp contraction in Indian economy in the April – June 2020 period, when the GDP came in at a negative to 23.9 per cent year-on-year (YoY) - the worst performance in nearly four decades.  “The severe fall in activity has damaged household and corporate incomes and balance sheets, amid limited fiscal support. A looming deterioration in asset quality in the financial sector will hold back credit provision amid weak bank capital buffers. Furthermore, high inflation has added strains to household income,” Fitch said.