India's GDP to be contracted in 2020: Moody's
The global rating agency lowered it's estimates for almost
all major economies. For the G20 advanced economies, the report projected a
contraction of 6.4% in 2020 followed by a 4.8% recovery in the coming year.
Moody's Investor Service further downgraded its growth forecast for India to -3.1% this calendar year compared to 0.2% in April.
The June 2020 update of its Global Macro Outlook, released
on Monday, expected a marginally stronger rebound at 6.9% in 2021, as opposed
to 6.2% in the April update.
The global rating agency lowered it's estimates for almost
all major economies. For the G20 advanced economies, the report projected a
contraction of 6.4% in 2020 followed by a 4.8% recovery in the coming year.
In April, Moody's had projected the output for this group of
economies at -5.8% for the year.
For the G20 emerging economies, the report projected a
contraction of 1.6% for the calendar year. Removing China, this figure would
have been worse at -4.7%, it said.
China is one of the few countries that have not seen a
downgrade from the April report, with Moody's sticking to its 1% forecast for
the country this year.
On the other hand, most of the major western economies saw
their projections declining further. The effect of lockdowns on activity in the
second quarter of the year would be larger than previously thought, it said.
"We have our 2020 growth forecast down from our
previous projections in April for a number of countries, including Germany,
France, Italy, the UK, Canada, Brazil, India, Indonesia, Saudi Arabia and
Argentina….The downward revisions for 2020 mostly reflect a reassessment of the
effects of the pandemic in the first half of the year, based on incoming
data," the report said.
Further, whereas earlier reports have considered a second
wave of Covid-19 infections as a worst-case scenario, the latest Moody's report
has included this in its baseline scenario.
"A critical assumption in our baseline expectations for
a gradual global economic recovery is that new coronavirus outbreaks are likely
in all countries, but that they will not result in a reimposition of widespread
lockdowns," Moody's said.
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