What’s in the news?

• Fitch Ratings, a leading credit rating agency, has released its Global Economic Outlook (GEO).
• Note: GEO is different from the World Economic Outlook released by the International Monetary Fund.

Highlights of the Report

• The report projected global GDP to contract 4.4% in the current year, but revised upwards China’s growth estimate to 2.7% for 2020. This would be more than twice as deep as the great recession in 2009.
• Fitch Ratings cut its 2020 GDP forecast for emerging markets, excluding China, to (-)5.7%, from (-)4.7% estimated in June.

India’s position

• Fitch has slashed India’s growth projection to (-)10.5% from (-)5% estimated earlier after official data released last week showed the April-June 2020 quarter GDP contracted by 23.9%.
• The report noted that India imposed one of the most stringent lockdowns worldwide in April-June and domestic demand fell massively. Limited fiscal support, fragilities in the financial system, and a continued rise in virus cases hamper a rapid normalisation in activity.
• Fitch revised China’s GDP growth forecast to 2.7%, from 1.2% in June, following the stronger-than-expected April-June outturn and continuing recoveries in investment, housing and exports.

Reference:

1. https://www.thehindu.com/business/Economy/global-economy-to-contract-44-china-to-grow-at-27/article32556065.ece