Home Economy Moody’s cuts FY21 growth forecast to 0%

Moody’s cuts FY21 growth forecast to 0%

The global rating agency had in November 2019 revised down its outlook for India from stable to negative, although its sovereign rating of Baa2 is still a notch above those of S&P and Fitch — both the rating agencies have assigned the lowest investment grade to India, with a stable outlook.

Moody’s Investors Service on Friday trimmed its FY21 growth projection sharply to 0 per cent for India in the wake of the Covid-19 outbreak and warned of a possible rating downgrade for the country if fiscal metrics “weaken materially”.

The global rating agency had in November 2019 revised down its outlook for India from stable to negative, although its sovereign rating of Baa2 is still a notch above those of S&P and Fitch — both the rating agencies have assigned the lowest investment grade to India, with a stable outlook.

In its latest credit opinion, Moody’s said: “This would probably happen in the context of a prolonged or deep slowdown in growth, with only limited prospects that the government would be able to restore stronger output through economic and institutional reforms.”

Moody’s warning follows a similar statement by Fitch and is expected to add to policy-makers’ unease, as they firm up a relief package to prop up the economy.

Already, several analysts have warned of a negative growth for the entire fiscal, amid a nation-wide lockdown. Manufacturing and services activities have witnessed unprecedented contraction in April, as per the PMI survey. Unemployment rate surged to as much as 27.1 per cent in the week through May 3, according to the Centre for Monitoring of Indian Economy. Moody’s, however, expects GDP growth to recover to 6.6 per cent in FY22.

 

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

RBI gold reserves up 40.4 tonnes in 2019-20, more than half of total holdings held overseas

The RBI’s total gold reserves were 612.56 tonnes in the preceding fiscal ended March 2019. With the addition of more stocks, the value of...

Currency with public continues to swell in line with coronavirus lockdown extension

The rise in currency with the public comes despite appeals by the government and the RBI to use digital payment tools amidst the coronavirus...

ICICI Bank posts 26% rise in Q4 net, sets aside Rs 2,725 cr for COVID-19-related provisions

Gross non-performing assets of the bank fell to 5.53 per cent of advances (Rs 41,409 crore) in Q4 of FY20 from 6.70 per cent...

AIIB clears $500-mn loan to support India’s fight against COVID-19

The project will be implemented by the National Health Mission (NHM), the National Centre for Disease Control (NCDC) and the Indian Council of Medical...

SBI slashes MCLR by 15 bps across all tenors

On March 27, the RBI, in its first COVID package, had slashed the repo rate by 75 bps to 4.40 per cent and cash...
Need Help? Chat with us