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Moody's Investors Service (MIS), an American credit rating agency, on Friday revised downward India's gross domestic product (GDP) growth forecast for India to 0 percent in fiscal year 2021, and cautioned that the country's sovereign rating could be downgraded if its fiscal metrics weaken materially.
This followed similar warning from Fitch Ratings, the international rating agency.
"This would probably happen in the context of a prolonged or deep slowdown in growth, with only limited prospects that the government would be able to restore stronger output through economic and institutional reforms," Moody's said in its latest credit opinion.
In November, it had revised its outlook for India's sovereign rating from stable to negative. Moody's credit rating of Baa2, the second-lowest investment grade score, is better than those of other agencies, such as SP and Fitch, which have assigned the "lowest" investment grade to India with a stable outlook.
India's ongoing nationwide lockdown to contain the spread of the COVID-19 pandemic, has led to massive retrenchment and loss of output.
The country's unemployment rate climbed to a staggering 27.1 percent in the week to May 3, and some 121.5 million Indians lost jobs in April, data released by the Centre for Monitoring of Indian Economy showed.
The Indian government is currently contemplating a stimulus package for the economy, including the source of financing to stem massive job losses and protect vulnerable sections of the society.
