Standard and Poor's lowers India's growth prospects to 5.2%

CHENNAI: Global credit rating agency Standard and Poor's (S&P) on Wednesday lowered the forecasts for India to 5.2 per cent from the earlier 5.7 per cent.

In a statement S&P Global Ratings said: "We lower our forecasts for China, India, and Japan for 2020 to 2.9 per cent, 5.2 per cent and -1.2 per cent (from 4.8 per cent, 5.7 per cent, and -0.4 per cent previously)."

According to S&P, the timing of a recovery depends, most of all, on progress in containing Coronavirus spread.

"Even if major progress is made during the second quarter, after a sustained period of stressed cash flow many firms will be in no position to resume investing quickly. Households that have either lost their jobs or have worked fewer hours will spend less. Banks will be busy managing the deterioration in asset quality. There will be pent-up demand but the longer the crisis drags on, the weaker it will be," S&P said.

Citing its report titled "Asia-Pacific Recession Guaranteed" S&P said the economic growth in 2020 in the region will more than halve to less than three per cent as the global economy enters a recession.

"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," Shaun Roache, the chief Asia-Pacific economist at S&P Global Ratings was quoted as saying in the statement. According to S&P, by recession, it means at least two quarters of well below-trend growth sufficient to trigger rising unemployment. (IANS)

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