BUSINESS

Moody’s cuts India GDP growth forecast to 2.5%

Global economy may contract by 0.5%

Moody’s Investors Service has slashed its GDP growth forecast for India to 2.5% in 2020 — a sharp drop from the earlier projection of 5.3% — due to the impact of the COVID-19 pandemic and the resultant lockdown.

The ratings agency expects the country’s economy to recover in 2021, estimating a growth rate of 5.8%, but warned that uncertainty regarding the virus’ spread and containment made it difficult to fully assess the economic toll of the crisis. India grew at 5% in 2019.

Globally, the world economy was facing an ‘unprecedented shock’ and the G20 countries were likely to see an overall contraction of GDP by 0.5%, according to Moody’s Global Macro Outlook 2020-21, released on Friday.

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