Home / Knowledge / News / Textiles / Moody's cuts India's 2020 growth forecast to 5.4%

Moody's cuts India's 2020 growth forecast to 5.4%

18
Feb '20
Pic: Shutterstock
Pic: Shutterstock
Growing concerns over the economic fallout of the coronavirus outbreak has led Moody's Investors Service to slash its 2020 growth projection for India to 5.4 per cent from 6.6 per cent earlier. The rating agency expects a shallower recovery in India as global growth is expected to take a hit following the outbreak. It also reduced its global growth projection, saying the outbreak has diminished optimism about prospects of an incipient stabilisation of global growth this year.

"Improvements in the latest high frequency indicators such as PMI data suggest that the economy may have stabilized. While the economy may well begin to recover in the current quarter, we expect any recovery to be slower than we had previously expected.

Accordingly, we have revised our growth forecasts to 5.4 per cent for 2020 and 5.8 per cent for 2021, down from our previous projections of 6.6 per cent and 6.7 per cent respectively," it said.

With the virus continuing to spread, it is still too early to make a final assessment of the impact on China and the global economy, Indian media reports cited Moody’s as saying.

"We have revised our global GDP [gross domestic product] growth forecast down, and we now expect G-20 economies to collectively grow 2.4 per cent in 2020, a softer rate than last year, followed by a pickup to 2.8 per cent in 2021. We have reduced our growth forecast for China to 5.2 per cent in 2020 and maintain our expectation of 5.7 per cent growth in 2021," it added.

Moody's assumes that the spread of the coronavirus will be contained by the end of the first quarter, allowing for resumption of normal economic activity in the second.

"At present, China's economy is by far the worst affected. However, the rest of the world also has exposure as a result of a hit to global tourism in the first half of this year and short-term disruptions to supply chains. The effects on the global economy could compound if the rate of infection does not abate and the death toll continues to rise, because supply chain disruptions in manufacturing would become more acute the longer it takes to restore normalcy," it said.

For India, Moody's said, a key to stronger economic momentum would be the revival of domestic demand, both rural and urban. But equally important is the resumption of credit growth in the economy, it cautioned.

"As data from the Reserve Bank of India (RBI) shows, credit impulse in the economy has deteriorated throughout the last year as a result of the drying up of lending from non-bank financial institutions as well as from banks. The deterioration in credit growth to the commercial sector is particularly stark," it added.

Fibre2Fashion News Desk (DS)


Must ReadView All

Pic: UKFT

Textiles | On 6th Apr 2020

UK extends COVID-19 business interruption loan scheme

The UK Fashion & Textile Association (UKFT) has announced that the...

Pic: Shutterstock

Apparel/Garments | On 6th Apr 2020

GMAC urges buyers to fulfil purchase contracts

The Garment Manufacturers Associations in Cambodia (GMAC) has...

Pic: Shutterstock

Information Technology | On 6th Apr 2020

Odd Concepts attracts funds despite Covid-19 crisis

Odd Concepts, an AI-based fashion tech company, has been able to...

Interviews View All

Headhonchos, Indian textile value chain

Headhonchos
Indian textile value chain

'One nation, one tax' is a great concept

Headhonchos, Indian fashion industry

Headhonchos
Indian fashion industry

Organic the first choice of any environment-conscious person

Neel Sawhney, One Friday

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Ramez Basmaji,

Ramez Basmaji

Fabusse is a Lebanon-based fashion agency that offers a variety of...

Ravindra Jain, Ashish Baid,

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Fan Liyuan,

Fan Liyuan

Chinese company Jiangsu Yingyang Nonwoven Machinery, established in 1993,...

Mohammad Hassan, Biax Fiberfilm

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Tiasha Renganathan, Twinery Innovations by MAS

Tiasha Renganathan
Twinery Innovations by MAS

Twinery-Innovations by MAS is the innovation arm of Sri Lankan company MAS ...

Sarah Denise Cordery, Sarah Denise Studio

Sarah Denise Cordery
Sarah Denise Studio

Manchester, England-based Sarah Denise Studio provides relevant fashion...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Akta Adani, India Boulevard

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search