Moody's Investors Service on Tuesday slashed India's growth forecast to 0.2 per cent for the 2020 calendar year from the earlier projection of 2.5 per cent released in March.
Stating that the economic costs of shutdown of the global economy are accumulating rapidly, Moody's in its Global Macro Outlook 2020-21 (April 2020 Update) projected that all G-20 advanced economies would contract by 5.8 per cent in 2020.
In November last year, before the emergence of the coronavirus, the rating agency was expecting the global economy to grow by 2.6 per cent this year.
Among the emerging economies in G-20, Moody's projected India to grow at 0.2 per cent in 2020 and 6.2 per cent in 2021. This compares to 5.3 per cent growth clocked in 2019.
"India extended a nationwide lockdown to 40 days from 21 days, but relaxed restrictions in rural areas to facilitate agricultural harvesting in the second half of April. The country has determined that many of these areas are free of the virus. India also plans a phased opening of different regions while continuing to carry out identification and contract tracing," Moody's said.
Late last month, the government had announced a Rs 1.7 lakh crore stimulus package comprising free foodgrains and cooking gas to poor and cash dole to poor women and elderly.
A second package, aimed at industries, is said to be in works and is likely to be announced shortly.
China is projected to grow by 1 per cent in 2020 and 7.1 per cent in 2021, as against 6.1 per cent in 2019.
Moody's in the report titled 'Global recession is deepening rapidly as restrictions exact high economic cost', said there are significant downside risks to its growth forecasts in the event that coronavirus pandemic is not contained and lockdowns have to be reinstated.
India, China and Indonesia are the only 3 G-20 countries which are projected to grow in 2020, while the others will see a contraction, according to the report.
The US economy is projected to contract by 5.7 per cent, the UK by 7 per cent, Italy by 8.2 per cent, Japan by 6.5 per cent and France by 6.3 per cent.
Moody's said the economic costs of the coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly.
Even with a gradual recovery, 2021 real GDP in most advanced economies is expected to be below pre-coronavirus levels.
The rating agency further said that it expects Brent spot price to average USD 35 per barrel and WTI spot to average USD 30 a barrel for this year.
"Oil prices will likely move up in 2021 as demand recovers along with economic growth. For 2021, we forecast Brent to average USD 45 per barrel and WTI to average USD 40 per barrel," it said.
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