Moody's Downgrades G20 Economic Growth Rate to Negative... Lowered Again After 3 Weeks (Comprehensive)

G20 Economic Growth Forecast Revised from 1.0% to -0.5%... Korea from 1.4% to 0.1%
"Gradual Recovery Expected from Q2 Next Year"

[Source: Moody's website / https://www.moodys.com]

[Asia Economy Reporter Hyunwoo Lee] The international credit rating agency Moody's has downgraded the economic growth rate of the world's major 20 countries (G20) to negative this year due to the economic recession caused by the novel coronavirus disease (COVID-19). Just three weeks ago, it had forecasted 1.0%, but it ultimately projected negative growth. South Korea's economic growth forecast was also sharply lowered from 1.4% to 0.1%. It is analyzed that the impact of reduced corporate activities and consumption due to COVID-19 will hamper the global economy until the second quarter of this year.

On the 25th (local time), Moody's announced in its international economic outlook report that the G20's gross domestic product (GDP) growth rate this year will record -0.5% amid the economic recession caused by the COVID-19 impact. Earlier, Moody's had announced a figure of 1.0% on the 6th of this month, and the forecast announced last month was 1.3%. Since November last year, Moody's has downgraded its forecast three times this year alone after projecting a 2.6% GDP growth rate for the G20. Moody's stated, "Due to the contraction of household and corporate activities caused by the COVID-19 situation and the increasing fiscal burden on governments, we have once again lowered the economic growth forecast."

[Source: Moody's website / https://www.moodys.com]

The GDP growth forecasts for advanced countries within the G20 have all turned negative. The U.S. growth rate, previously expected at 1.5%, was adjusted to -2.0%, and the Eurozone was revised from 0.7% to -2.2%. Japan, which was expected to stagnate at 0.0%, is now forecasted to record -2.4%. The growth rates for the UK (-3.0%), France (-1.4%), Italy (-2.7%), and Canada (-2.2%) are all expected to be negative. Australia is at 0.0%. South Korea's growth forecast was lowered by 1.3 percentage points from 1.4% to 0.1%.

The GDP growth rates for emerging countries within the G20 were also significantly revised. China’s forecast was lowered from 4.8% to 3.3%, a decrease of 1.5 percentage points, and India’s was cut from 5.3% to 2.5%, less than half. Moody's said, "Corporate activities and demand will be significantly contracted until the first half of this year, hindering growth," and added, "Recovery will gradually begin from the second quarter of next year." It further noted, "Emerging economies, which relatively lack social safety nets and resources to support corporate and household incomes, may experience a longer-lasting economic slowdown."