S&P Global Ratings on Wednesday cut its forecast for India’s economic growth to 5.2 per cent for the current fiscal, from 5.7 per cent earlier, in light of the new coronavirus pandemic denting travel and economic activity across the globe, dragging household and business confidence and rising unemployment rates.
The ratings agency also lowered their 2020 GDP forecasts for Asia Pacific saying growth in the region would more than halve to less than 3 per cent as the global economy enters a recession in 2020, with downturns also expected in the U.S. and the eurozone.
The rating agency cut its 2020 growth forecast for China to 2.9 per cent from 4.8 per cent previously. It added that Japan was now expected to contract a deeper 1.2 per cent, compared with a previous forecast of a 0.4 per cent downturn.
"An enormous first-quarter shock in China, shutdowns across the U.S. and Europe, and local virus transmission guarantees a deep recession across Asia Pacific," said Shaun Roache, chief Asia-Pacific economist at S&P Global Ratings. The agency defines recession as two quarters of below-trend growth sufficient to trigger rising unemployment.
Other economies in the region are expected to have their GDP growth forecasts cut by about 50 to 100 basis points, S&P said, adding that risks remain on the downside, with emerging markets the most vulnerable.
Moody's, meanwhile, now expects the Japanese economy to remain stagnant in 2020. Singapore's economic output is expected to drop 0.2 per cent, while those of Hong Kong and Macao are seen contracting 3.5 per cent and 20 per cent, respectively. The rating agency previously cut China's growth outlook to 4.8 per cent from 5.2 per cent.
"The longer the disruptions last, the greater the risk of a global recession," said Christian de Guzman, a senior vice president at Moody's.