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Moody's Investors Service Today Cut India's Growth Forecast To 0.2 Per Cent For 2020, Fro

Moody's Investors Service today cut India's growth forecast to 0.2 per cent for 2020, from 2.5 per cent projected in March. This will be the first time in 29 y


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 Moody's Investors Service today cut India's growth forecast to 0.2 per cent for 2020, from 2.5 per cent projected in March. This will be the first time in 29 years that India's growth rate will dip below 1%. Moody's on Tuesday stated that the Coronavirus pandemic will drive a deep recession in 2020 and leave some longer-term marks on the global economy. Moody's expects the G-20 advanced economies as a group to contract by 5.8%. EM countries now expected to grow -3.5%, and China at 1.0%. 

In its latest report, it said, "Longer or repeated shutdowns would severely harm the real economy, with the potential to trigger a financial crisis. In such a scenario, the economic shock will quickly escalate into a deep financial crisis far worse than the experience of the global financial crisis, in scale and scope. Rising inequality, as the weakest sections bear the brunt of the shock, could fuel social discontent and political unrest."

"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 in its report.

The Ratings agency said in March, "In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors."

It is worth mentioning that Fitch Ratings on Thursday slashed India's economic growth projections to 0.8% in the current 2020-21 fiscal saying an unparalleled global recession was underway due to disruptions caused by the outbreak of coronavirus pandemic and resultant lockdowns.

 Moody's Investors Service today cut India's growth forecast to 0.2 per cent for 2020, from 2.5 per cent projected in March. This will be the first time in 29 years that India's growth rate will dip below 1%. Moody's on Tuesday stated that the Coronavirus pandemic will drive a deep recession in 2020 and leave some longer-term marks on the global economy. Moody's expects the G-20 advanced economies as a group to contract by 5.8%. EM countries now expected to grow -3.5%, and China at 1.0%. 

In its latest report, it said, "Longer or repeated shutdowns would severely harm the real economy, with the potential to trigger a financial crisis. In such a scenario, the economic shock will quickly escalate into a deep financial crisis far worse than the experience of the global financial crisis, in scale and scope. Rising inequality, as the weakest sections bear the brunt of the shock, could fuel social discontent and political unrest."

"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 in its report.

The Ratings agency said in March, "In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors."

It is worth mentioning that Fitch Ratings on Thursday slashed India's economic growth projections to 0.8% in the current 2020-21 fiscal saying an unparalleled global recession was underway due to disruptions caused by the outbreak of coronavirus pandemic and resultant lockdowns.

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