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: ECOS

Textiles | On 22nd Apr 2021

ECOS urges EC to apply ecodesign principles to textile products

The international NGO Environmental Coalition on Standards (ECOS) has ...

Pic: Salvatore Ferragamo

Apparel/Garments | On 22nd Apr 2021

Salvatore Ferragamo launches new platform to discuss sustainability

Italian luxury goods company Salvatore Ferragamo has launched...

Pic: Lululemon

Apparel/Garments | On 22nd Apr 2021

Canadian retailer Lululemon announces sustainability initiatives

Canada-based Lululemon Athletica has announced 2 new initiatives that ...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Opportunity now to reimagine processes & systems in a digital environment

Textile Industry, Head honchos

Textile Industry
Head honchos

Social media critical in regeneration of businesses

Textile Industry, Head honchos

Textile Industry
Head honchos

Virtual reality would be the new normal

Manoj Sorathiya,

Manoj Sorathiya

Surat-based Sunrise Imports & Exports Co is a manufacturer and...

Nina Smith,

Nina Smith

GoodWeave International, a nonprofit working to end child, forced and...

Neeraj Sharma,

Neeraj Sharma

Headquartered in Surat, Gujarat, Orange O supplies digital textile...

Suresh Patel, Non Woven Federation of India

Suresh Patel
Non Woven Federation of India

The Non Woven Federation of India (NWFI), representing the regional...

Sachin Pendharkar, Dieffenbacher India Pvt Ltd

Sachin Pendharkar
Dieffenbacher India Pvt Ltd

Germany-based Dieffenbacher Group is a producer of high-quality composites ...

Silverio Baranzano, Fitesa

Silverio Baranzano
Fitesa

Fitesa is a leader in the nonwoven fabrics industry, specialising in...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

Ruma Devi, Gramin Vikas Evam Chetna Sansthan

Ruma Devi
Gramin Vikas Evam Chetna Sansthan

Ruma Devi is a jet-setting promoter of artisans who has empowered...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

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 2021

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


Advanced Search