EIU said the global economy will shrink by 2.2%. If the EIU forecast is realised, India will emerge as the fastest-growing major economy in the world even at the sharply reduced rate and along with China and Indonesia will record expansion against the backdrop of the devastation caused by the coronavirus.
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Moody’s said the G20 economies, which is a grouping of developed and emerging countries, will experience an unprecedented shock in the first half of this year and will contract in 2020 as whole, before picking up in 2021. Among the G20 countries, the EIU downgraded growth in Italy, Germany and Brazil by over 7 percentage points. Although India is among the five major economies that saw lowest downgrade, but its economic growth is also being cut by about 4 percentage points, according to EIU.
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Moody’s said it had revised downwards global growth forecast for 2020 as the rising costs of the coronavirus shock, particularly for advanced economies, and the policy responses to combat the downturn were becoming clearer. “We now expect GDP (gross domestic product) in the global economy to contract by 0.5% in 2020, followed by a pick-up to 3.2% in 2021. In November last year, before the emergence of the coronavirus, we were expecting the global economy to grow by 2.6% this year,” Moody’s said in a report.
The global rating agency expects the Indian economy to return to a healthy growth rate of 5.8% next year. “The government of India and South Africa have announced 21-day lockdowns. We expect these measures to dampen economic growth,” Moody’s said.