Moody’s Investors Service on Tuesday slashed India growth forecast for the calendar year 2020 to 0.2 per cent, from 2.5 per cent projected in March. For 2021, Moody’s expects India’s growth to rebound to 6.2 per cent.
In its report titled – Global Macro Outlook 2020-21 (April 2020 update), Moody’s has lowered G-20 advanced economies as a group to contract by 5.8 per cent in 2020. Moody’s said the economic costs of coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly.
It expects G-20 advanced economies as a group to contract by 5.8 per cent in 2020. Even with a gradual recovery, 2021 real GDP in most advanced economies is expected to be below pre-coronavirus levels. China’s economy is forecast to grow by 1 per cent in 2020.
“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.
Earlier last month, the UN had slashed India’s projected growth rate to 1.2 per cent in 2020 and forecast that the global economy will contract sharply by 3.2 per cent as the Covid-19 pandemic paralyses the world.
The World Economic Situation and Prospects released by the UN had said “Cumulatively, the world economy is expected to lose nearly $ 8.5 trillion in output in 2020 and 2021, nearly wiping out the cumulative output gains of the previous four years. India’s economic growth is forecast to slow to 1.2 per cent in 2020, a further deterioration from the already slowed growth of 4.1 per cent in 2019.” it had said in its report.
India, which grew at 6.8 per cent in fiscal year 2018, is forecast to recover slightly and clock a 5.5 per cent growth rate in 2021.
The UN report had noted that the policymakers across the South Asian region have, sometimes reluctantly, adopted more and more restrictions on activity to avert this threat, but this comes at a heavy economic toll.