The group’s asset base surpassed Dh900 billion
The Moody's report maintained its estimate of 5.8 per cent growth for India in 2021. The latest growth reduction of 2.2 per cent is in sharp contrast to the previous downgrade of 0.1 per cent.
Earlier this month Moody's had revised its estimate to 5.3 per cent from 5.4 per cent in February. It had said the country's growth could slow down to 5 per cent if the virus was not contained in its previous update.
Prior to the lockdown, S&P Global Ratings had downgraded its India growth forecast to 5.2 per cent for 2020 while the Organisation for Economic Cooperation and Development lowered India's growth to 5.1 per cent for this calendar year. More revisions are likely to come given the extent and duration of the lockdown.
Moody's also sharply revised China's growth forecast to 3.3 per cent this year down from 4.8 per cent. "Based on the latest high frequency indicators, we estimate that China's economy contracted by around 10 per cent in the first quarter on a sequential basis," Moody's said.
The agency forecast negative growth for major Western economies with estimates of contractions of 5.4 per cent in Germany, 4.5 per cent in Italy, 4.3 per cent in the US, 3.9 per cent in the UK and 3.5 per cent in France during the first half of 2020. However, adequate social safety nets and capital inflows from risk-off sentiment in emerging markets would result in a relatively better recovery in these economies. Moody's expects the G20's combined GDP to contract by 0.5 per cent in 2020 compared to a 2.6 per cent growth forecast in November last year, before the emergence of Covid-19.
Growth in these economies is likely to recover to 3.6 per cent in 2021, the report said.
Although governments and regulators across the globe are taking measures to contain the impact on their economies, which are likely to grow and deepen, the downside risks to growth remain sizeable.
- issacjohn@khaleejtimes.com
The group’s asset base surpassed Dh900 billion
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