Moody's again slashes India's growth projection for 2020 to 5.3%

In less than a month’s time, rating agency Moody’s Investors Service has revised downward its baseline growth projections for India to 5.3% for 2020 from 5.4% earlier, cautioning that an extensive and prolonged slump as a result of COVID-19 outbreak will reduce growth in Asia’s third largest economy to 5% during the same calendar year.

On 17 February, the rating agency had reduced India's growth projection to 5.4% from 6.6% earlier for the calendar year 2020.

The latest revision, which is part of the rating agency’s latest “Global Macro Outlook" said the global spread of the coronavirus is resulting in simultaneous supply and demand shocks. “We expect these shocks to materially slow economic activity, particularly in the first half of this year. We have therefore revised our 2020 baseline growth forecasts for all G-20 economies. We expect these countries, as a group, to grow by 2.1% in 2020, 0.3 percentage point lower than our previous forecast," it added.

Moody’s also lowered its 2020 forecast for China's growth to 4.8% from its previous estimate of 5.2%. For the US, it now expects real GDP to grow by 1.5% in 2020, down from the previous estimate of 1.7%.