Fitch Ratings on Wednesday, July 7,  cut India’s growth forecast to 10% for the current fiscal, from 12.8% estimated earlier, due to slowing recovery post second wave of Covid, and said rapid vaccination could support a sustainable revival in business and consumer confidence.

In a report, the global rating agency said the challenges for banking sector posed by the coronavirus pandemic have increased due to a virulent second wave in the first quarter of the financial year ending March 2022 (FY22).

Fitch believes that rapid vaccination could support a sustainable revival in business and consumer confidence; however, without it, economic recovery would remain vulnerable to further waves and lockdowns.

It said localized lockdowns during the second wave kept economic activity from stalling to levels similar to those during 2020, but disruption in several key business centres has slowed the recovery and dented Fitch’s expectations of a rebound to pre-pandemic levels by FY22. India’s economy contracted 24.4% in June quarter of 2020.