Fitch Solutions on Wednesday said the extension of the nationwide lockdown by nearly three more weeks to May 3 is unlikely to stem the surge in coronavirus infections even as the economic and humanitarian crisis will exacerbate because of the government’s slow response.

“We at Fitch Solutions have revised down our forecast for India’s real GDP growth to 1.8 per cent in 2020-21, from 4.6 per cent estimated previously,” it said in a note on Wednesday.

“The key drivers behind our revision is a slow and weak fiscal response and a worsening of the Covid-19 outbreak domestically, which we expect to lead to a contraction of private consumption and investments,” Fitch Solutions said.

The Covid-19 outbreak in India has worsened and in a span of about three weeks, confirmed cases in the country have ballooned to over 18,000, and deaths were over 500 as of April 20, from 700 cases and 20 deaths at the end of March, it said.

“Even at these numbers, we believe that India is nowhere near the peak of the infection given its large population of 1.3 billion,” it said.

It has also revised its private consumption growth forecast to a 2.5 per cent contraction from a 3 per cent expansion previously.

Citing data from the Centre for Monitoring Indian Economy (CMIE) on unemployment, Fitch Solutions said the resultant income loss by a large part of the population because of job losses and business closures, particularly in the MSME segment, will constrain private consumption over the coming quarters.

The CMIE had said that India’s unemployment rate surged to over 20 per cent after the nationwide lockdown on March 24, from 6.7 per cent just a week before that.