Moody’s Investor Service has lowered the 2020 growth forecast for China to 4.8 per cent from 5.2 per cent earlier, and to 1.5 per cent for the United States from the earlier 1.7 per cent. For India, the downside risks of the novel coronavirus COVID-19 are relatively lower with baseline growth forecast changing by mere 10 basis points from February assessment of 5.4 per cent to 5.3 per cent.

Even in case of extensive slump, India's growth is projected to fall to 5 per cent.

The global spread of COVID-19 is resulting in simultaneous supply and demand shocks and will result in further slowing down of the global economic activity particularly in the first half of this year, Moody's said in its Global Macro Outlook 2020-2021.

The baseline growth for 2020 has been revised for all G-20 economies. Accordingly, these countries, as a group, are now expected to grow by 2.1 per cent in 2020, 0.3 percentage point lower than Moody's previous forecast.

Moody's has said that global recession risks in wave of coronavirus spread have increased, according to global newswires.

"The longer the outbreak affects economic activity, the demand shock will dominate and lead to recessionary dynamics. In particular, a sustained pullback in consumption, coupled with extended closures of businesses, would hurt earnings, drive layoffs and weigh on sentiment. Such conditions could ultimately feed self-sustaining recessionary dynamics. Heightened asset price volatility would magnify the shock," it said in its report.

Fibre2Fashion News Desk (DS)

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