Moody's Investors Service has revised India's GDP growth forecast for the calendar year 2020 upwards to -8.9% contraction from -9.6% contraction forecasted earlier. 

In its Global Macro Outlook 2021-22, Moody's noted that the global economic recovery over the coming year will be highly dependent on the development and distribution of a coronavirus vaccine, effective pandemic management as long as the virus remains a public health risk, and government policy support. 

Moody's noted that the decline in new infections along with high recovery rates are bending the pandemic curve and allowing for further easing of restrictions on mobility.

"We therefore forecast a gradual improvement in economic activity over the coming quarters. However, slow credit intermediation will hamper the pace of recovery because of an already weakened financial sector," Moody's said.

The report also notes that it sees a "very gradual improvement in economic activity" of emerging market countries like India, Argentina, Brazil, Mexico, Indonesia, Turkey and South Africa.

Moody's Vice President-Senior Credit Officer Madhavi Bokil said: "The COVID-19 shock has triggered extraordinary fiscal policy responses from governments in advanced economies, including the US, Europe and Japan, facilitated by a large expansion of their central bank asset purchase programs."

"Looking ahead, we expect advanced economy central banks to actively hold down yields across all maturities and to expand asset purchases to include a wider range of assets if the economic backdrop remains difficult. For most emerging market countries, the scope for additional rate cuts is limited and we do not expect emerging market central banks to carry on with quantitative easing measures once the recovery strengthens."