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Moody’s cuts India’s growth forecast to 2.5% for calendar year 2020
Mar-30-2020

Moody’s Investors Service has sharply cut India’s growth forecast to 2.5% for calendar  year 2020 from 5.3% earlier after the government ordered a nationwide lockdown to curb the spread of the coronavirus. It estimates a 5% growth for calendar year 2019. It expects a sharp rebound in India’s growth in calendar year 2021 to 5.8%.

India imposed a three-week nationwide lockdown to curb the spread of the coronavirus pandemic, starting March 25. It said the lockdown will dampen economic growth in India, already facing credit availability issues. In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors.

Besides, it said that advanced economies are seen contracting 2% in 2020 against 1.7% growth in 2019 while emerging economies will slow to 1.9% from 4.2%. China is forecast to grow 3.3% in 2020 against 6.1% in the previous year. A general lack of social safety nets, weak ability to provide adequate support to businesses and households, and inherent weaknesses in many major emerging market countries will amplify the effects of the coronavirus-induced shock.

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