Moody’s Investors Service on Friday slashed India’s economic growth projection for 2020 to 2.5% from 5.3% earlier, holding that the COVID-19 outbreak will cause unprecedented shock to the global economy. “The governments of India (Baa2 negative) and South Africa (Baa3 negative) have announced 21-day lockdowns.
We expect these measures to dampen economic growth in both countries this year. For India, we are now projecting growth rates of 2.5% in 2020 followed by 5.8% next year," Moody’s said in its Global Macro Outlook.
The rating agency said in India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors.