Moody's cuts 2020 GDP growth forecast to 5.4% from 6.6%

Moody's Investors Service has cut India’s 2020 Gross Domestic Product (GDP) growth forecast to 5.4 percent from 6.6 percent. At the same time, it has cut the 2021 GDP growth forecast to 5.8 percent from 6.7 percent.

Weakness across global economy due to the impact of the novel coronavirus outbreak could hurt India’s recovery, Moody's said. Recovery might begin in the current quarter, but it may be slower than expected, it added.

The business and financial services company has said citing 'high frequency data' that India's economy may have stabilised.

India’s economic recovery will likely be shallow, Moody's added.

In the second quarter of the current fiscal year, GDP growth fell to 4.5 percent. The government has pegged GDP growth at 5 percent in FY19.

The coronavirus outbreak has lowered prospects of stabilisation of the global economy, Moody's said.