Moody’s Investor Service (Moody’s) has revised upwards its GDP forecast for India to an 8.9 per cent contraction in 2020 from a 9.6 per cent contraction forecast earlier as the economy inches back to growth with several restrictions being lifted after a strict nationwide lockdown.

In its Global Macro Outlook 2021-22, Moody’s also revised upwards India’s GDP forecast for 2021 to 8.6 per cent growth from an earlier projection of 8.1 per cent expansion.

The Indian economy had grown 4.8 per cent in 2019.

The global rating agency was, however, quick to add that the recovery is patchy.

Its projections come after the economy contracted a record 23.9 per cent in the April-June period of this year.

On Wednesday, a monthly bulletin from the RBI said India has entered a technical recession in the first half of 2020-21 for the first time in its history as the July-September period is likely to record the second successive quarter of GDP contraction.

It, however, added that if the recovery seen in October continues for the next two months, the Indian economy will come out of the contraction in the third quarter of this fiscal.

“We 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,’’ the rating agency said.