Moody's Investors Service sees India's economic growth at zero' in FY21
Mumbai: Moody's Investors Service on Friday said it estimates India's GDP growth to hit zero' in FY21 and pointed to a wide fiscal deficit, high government debt, weak social and physical infrastructure, and a fragile financial sector.
The quality of India's economic growth has declined in recent years, demonstrated by financial stress among rural households, relatively low productivity and weak job creation, the agency said.
In its forecast for FY21, the agency estimated India's gross domestic product (GDP) growth at zero, meaning the country's economic growth will remain flat this financial year, and the same is seen accelerating to 6.6 per cent in FY22.
In its credit opinion which comes following the change in the forecast, Moody's warned that the COVID-19 "shock will exacerbate an already material slowdown in economic growth, which has significantly reduced prospects for durable fiscal consolidation".
Analysts across the board have been certain about the heavy economic toll that the pandemic will take on the country.
Moody's local arm Icra has pegged for a contraction of up to 2 per cent in the growth as a result of the crisis, which has seen the country being put under a lockdown for nearly two months to arrest the spread of infections.
Late last month, Moody's had slashed its calendar year 2020 GDP growth forecast to 0.2 per cent.
Its negative outlook on the sovereign rating, which was revised last in November 2019 from stable', reflects increasing risks that economic growth will remain significantly lower than in the past, it said, adding that this takes into account the deep shock triggered by the virus outbreak.
Meanwhile, India's credit strengths include a large and diverse economy, favourable demographic potential and a stable domestic financing base to fund the government debt, it noted.
In March, the government had announced a relief package worth Rs 1.7 lakh crore, and there are speculations of another follow-up package in the offing.
These measures will reduce the depth and duration of India's growth slowdown, but there is a probability of an "entrenched weakening" on prolonged financial stress among rural households, weak job creation and a credit crunch among non-bank financial institutions, it said.
Reform prospects, which can take care of some of the concerns with the Indian economy, have "diminished", the agency said.
It further warned that a downgrade in the rating could happen if the fiscal metrics weakened materially, and made it clear that a "negative" outlook indicates that an upgrade in the rating is unlikely in the near term.
However, the outlook can be changed to "stable" if the fiscal metrics stabilise, it added.
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Kane scores hat trick and Bayern extends Bundesliga lead to 11 points
Berlin (AP): Harry Kane was substituted in at the hour mark and still had enough time to score a hat trick on Saturday.
The England captain took his goal tally for Bayern Munich this season to 28 and the defending champions extended their lead to 11 points after thrashing Stuttgart 5-0 on the road.
Second-placed Leipzig later hosted Eintracht Frankfurt.
With Kane on the bench, Konrad Laimer took on the scoring duties and produced a superb finish. The Austria midfielder collected a long ball and combined with Michael Olise before slotting home from close range with a subtle backheel past goalkeeper Alexander Nübel in the 11th minute.
Kane made it 2-0 with a low shot into the bottom corner and Josip Stanišic added his name to the scoresheet. Kane added further luster to the win from the penalty spot after Stuttgart was reduced to 10 men for Lorenz Assignon using his arm to clear a ball in the 81st.
Kane completed the rout with a flick from an Olise cross with two minutes left. He has found the net five more times with England this season, taking his total to 33 goals for club and country.
Stuttgart had chances before halftime but lacked a cutting edge. Midfielder Nikolas Nartey thought he equalized only for his goal to be ruled out for offside after a VAR check.
Bayern Munich is unbeaten in 16 league and cup games against German opposition this season.
Other results
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Bayer Leverkusen suffered a fourth loss, 2-0 at Augsburg.
Defender Dimitrios Giannoulis put the host in front after six minutes then turned provider to set up forward Anton Kade. Leverkusen, which hit the woodwork, remained in fourth place, 14 points behind Bayern.
Wolfsburg scored from all of its shots on target and moved four points clear of the relegation zone after beating Union Berlin 3-1. Heidenheim defeated Freiburg 2-1. Cologne and St. Pauli drew 1-1.
