Moody’s Investors Service slashed its estimate of India’s GDP growth during calendar year 2020 to 2.5 %, from an earlier estimate of 5.3 %, saying that the coronavirus pandemic will cause unprecedented shock to the global economy.
In its Global Macro Outlook 2020-21, Moody’s said that India is likely to see a sharp fall in incomes at the estimated growth rate of 2.5 %, further weighing on domestic demand and pace of recovery in 2021.
“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 said.
With the latest growth forecast, Moody’s Investors Service has more than halved the country’s growth forecast for 2020 within a span of 3 to 4 weeks. Last time around, the rating agency had revised its growth estimate from 5.4 per cent to 5.3 per cent. The global ratings agency, however, maintained its estimate of 5.8 per cent growth for India in 2021.