New Delhi Moody's Investors Service on Tuesday slashed India's growth forecast to 0.2% for the 2020 calendar year from the earlier projection of 2.5% released in March. Stating that the economic costs of shutdown of the global economy are accumulating rapidly, Moody's in its Global Macro Outlook 2020-21 (April 2020 Update) projected that all G-20 advanced economies would contract by 5.8% in 2020.
In November last year, before the emergence of the coronavirus, the rating agency was expecting the global economy to grow by 2.6% this year. Among the emerging economies in G20, Moody's projected India to grow at 0.2% in 2020 and 6.2% in 2021.
This compares to 5.3% 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.
Late last month, the government had announced a Rs 1.7 lakh crore stimulus package comprising free foodgrains and cooking gas to poor and cash dole to poor women and elderly. A second package, aimed at industries, is said to be in works and is likely to be announced shortly. China is projected to grow by 1% in 2020 and 7.1% in 2021, as against 6.1% in 2019.
Moody's in the report titled 'Global recession is deepening rapidly as restrictions exact high economic cost', said 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%, the UK by 7%, Italy by 8.2%, Japan by 6.5% and France by 6.3%. Moody's said the economic costs of the coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly