Moody's cuts India GDP growth forecast for 2022, sees Russia economy shrinking by 7%

In its Global Macro Outlook for 2022-23, the agency said economic growth will suffer as the fallout from Russia's invasion of Ukraine builds.

Moody sees the risks of damagingly high input costs and consumer inflation over an extended period due to the spike in commodity prices.  It said that disruption in financial and business operations poses risks to the highly integrated global economy.

Heightened security and geopolitical risks will exert economic costs and dent sentiment, it said.

Moody's now expects G20 economies to expand 3.6 percent collectively in 2022, as against 4.3 percent earlier, and three percent in 2023. It expects Russia's economy shrinking by seven percent in 2022, and three percent in 2023 -- the only G20 economy it sees contracting this year.

Moody's also warned that in alternative downside scenarios, the global economy could tip into a recession.

The credit ratings agency's outlook follows a 25-basis-point hike in pandemic-era interest rates by the Federal Reserve on Wednesday -- its first increase in more than three years. The US central bank has signalled one hike at each of the remaining six FOMC meetings this year.