Joining the downgrade chorus, Moody’s Investors Service also slashed India growth forecast for calendar year 2020 to 0.2 per cent, from 2.5 per cent projected in March. However, for 2021, the rating agency expects India’s growth to rebound to 6.2 per cent.
The rating agency had cut its projections from 5.2 per cent to 2.5 per cent after Prime Minister Narendra Modi announced a nationwide lockdown on March 24.
With these forecasts, India will lose the tag of fastest growing economy in the World to China in 2020, 2021 also. In 2019, India grew at 5.3 per cent, against China’s 6.1 per cent. While in 2020 & 21, China is projected to grow 1 per cent in 2020 and 7.1 per cent in 2021.
On the flip side, only three economies- China, India, and Indonesia are projected to witness economic growth in 2020 by Moody’s. It expects G20 advanced economies as a bloc to see a fall in its GDP by 4 per cent in 2020.
Japanese brokerage Nomura has predicted India’s economy to contract 0.5 per cent, while the Confederation of Indian Industry said the economy may contract by 0.9 per cent. India Ratings & Research believed the contraction may be far steeper at 2.1 per cent if the lockdown is extended beyond May 3.