Moody's Investors Service has said that India, China and Indonesia will be the only G-20 emerging economies to post a strong enough pick up in real GDP in the second half of 2020. The global ratings agency has retained its projection of 3.1 per cent growth contraction for India in 2020.
For 2021, Moody's has projected Indian economy to grow at 6.9 per cent. In FY20, the Indian economy grew at the slowest pace in eleven years at 4.2 per cent.
The global ratings agency projected a 4.6 per cent contraction for G-20 economies in 2020, followed by 5.3 per cent growth in 2021. Barring China, economic activity is expected to fall in 2020 in every G-20 economy.
"The economic outlook of emerging market countries is more challenging than in advanced economies. In our baseline projections, China, India and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020 and full-year 2021 to end next year above pre-coronavirus levels," Moody's said in the August update of Global Macro Outlook 2020-21 which was released on Tuesday.
The ratings agency further said that even as economic recovery is underway, its continuation will be closely tied to containment of the pandemic.
"Over time, geopolitical tensions between competing powers could exacerbate in a less interdependent world. Asian countries are particularly vulnerable to changes in geopolitical dynamics," it said.
"The rise in tensions between China and countries bordering the South China Sea and clashes on the border with India suggest that geopolitical risks are rising for the entire region," Moody's added.
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