Moody's Investors Service recently revised upwards India’s gross domestic product (GDP) forecasts to 8.9 per cent contraction in the 2020 calendar year, as the economy reflates after a long and strict nationwide lockdown. It also revised upwards the forecast for calendar year 2021 to 8.6 per cent growth from an earlier projection of 8.1 per cent expansion.
Its earlier projection was a 9.6 per cent contraction for calendar year 2020.Moody's Investors Service recently revised upwards India's gross domestic product (GDP) forecasts to 8.9 per cent contraction in the 2020 calendar year, as the economy reflates after a long and strict nationwide lockdown. It also revised upwards the forecast for calendar year 2021 to 8.6 per cent growth from an earlier projection of 8.1 per cent expansion. #
However, the rating agency, in its Global Macro Outlook 2021-22, said the recovery has been patchy.
The Indian economy had grown by 4.8 per cent in 2019.
"India's economy had the biggest contraction, 24 per cent year-over-year in the second quarter (April-June), as a result of a long and strict nationwide lockdown," the rating agency said.
A steady decline in new and active cases coronavirus cases since September, if maintained, should enable further easing of restrictions. "We, therefore, forecast a gradual improvement in economic activity over the coming quarters," Moody’s was quoted as saying by a news agency. "However, slow credit intermediation will hamper the pace of recovery because of an already weakened financial sector."
Moody''s said the nascent global economic recovery is under threat from rising COVID-19 cases in the United States and Europe.
"All of the G-20 countries have sustained severe output losses this year, but the contraction in some economies is sharper than in others. The pace of improvement will be asymmetric across countries," it said. The recovery path is beset by uncertainty and will remain highly dependent on the development and distribution of a vaccine, effective pandemic management, and government policy support, it said.
For the G-20 advanced economies, the rating agency forecast a 5.1 per cent contraction in 2020, followed by a growth of 4.2 per cent in 2021 and 3.3 per cent in 2022.
"We forecast a very gradual improvement in economic activity of other emerging market countries, namely Argentina, Brazil, Mexico, India, Indonesia, Turkey and South Africa," it added.
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