Moody's slashes India growth forecast to 0.2% from 2.6% for 2020

New Dwlhi, April 29: Moody's Investors Service on Wednesday slashed India's growth forecast to 0.2 per cent for the 2020 calendar year from the earlier projection of 2.5 per cent released in March. Stating that the economic costs of shutdown of the global economy are accumulating rapidly, Moody in its Global Macro Outlook 2020-21 projected that all G-20 advanced economies would contract by 5.8 per cent in 2020.

 

It is in the month of November last year, before the emergence of the coronavirus, that the rating agency was expecting the global economy to grow by 2.6 per cent this year. Among the emerging economies in G-20, Moody's projected India to grow at 0.2 per cent in 2020 and 6.2 per cent in 2021. This compares to 5.3 per cent growth clocked in 2019.

 

 

"India extended a nationwide lockdown to 40 days from 21 days, but relaxed restrictions in rural areas to facilitate agricultural harvesting in the second half of April. The country has determined that many of these areas are free of the virus. India also plans a phased opening of different regions while continuing to carry out identification and contract tracing", Moody's said.

 

In its report titled 'Global recession is deepening rapidly as restrictions exact high economic cost', the agency further noted that there are significant downside risks to its growth forecasts in the event that coronavirus pandemic is not contained and lockdowns have to be reinstated. India, China and Indonesia are the only 3 G-20 countries which are projected to grow in 2020, while the others will see a contraction, according to the report.

 

The US economy is projected to contract by 5.7 per cent, the UK by 7 per cent, Italy by 8.2 per cent, Japan by 6.5 per cent and France by 6.3 per cent. Moody's said the economic costs of the coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly. Even with a gradual recovery, 2021 real GDP in most advanced economies is expected to be below pre-coronavirus levels.

 

Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides international financial research on bonds issued by commercial and government entities.