Side effect of Corona: Moody's projected GDP growth for this year to 5.4 percent

New Delhi, 17 February 2020 Monday

Corona is impacting the world economy and its impact on the Indian economy as well. Moody's has lowered its GDP growth forecast for this year. This is a setback for the Modi government.

Rating agency Moody's Investors Service has lowered India's GDP growth projections for the year 2020. Moody's has now reduced this estimate from 6.6 percent to 5.4 percent, while GDP growth estimates have been reduced from 6.7 percent to 5.8 percent in 2021.

It is worth mentioning here that the outbreak of the Corona virus in China has affected the entire world economy. More than 142 people have died of coronavirus (Covid-19) in China on Sunday. This brings the total death toll to 1775.

Moody's said the slowdown in the global economy could slow India's GDP growth due to the outbreak of the novel corona virus (COVID-19).

He said that any kind of reform in India must be considered less than expected. However, the agency has said that the recent Indian economy's financial data is expected to improve and this indicates that the economy may regain momentum in the coming days.

The Indian economy will improve in 2020-21

Moody's believes that "the Indian economy may begin to improve in 2020-21, but its pace will be lower than previously anticipated." Moody's said, "The improvement in signals like PMI figures indicates that the economy has stabilized. The economy will see improvement in the current quarter but the pace will be slower than before.

Moody's also downgraded China's growth rate this year

Moody's has projected China's growth rate to 5.2 percent this year and 2.4 percent for the year 2021. Moody's said the outbreak of the Corona virus would have a significant negative impact on China's economy.

"Recent PMI data shows that the Indian economy has stabilized and the current quarter has begun to improve, but we think the recovery will be at a slower pace than previously expected," said Moody's. That is why we have projected our growth forecast for the year 2020 to be 5.4 percent and for 2021 5.8 percent.