Moody's Investors Service has revised upwards its GDP forecasts for India to (-) 8.9% contraction in the 2020 calendar year, as the economy reflates after a long and strict nationwide lockdown.

Recovery, however, is patchy as restrictions due to Covid-19 have eased only slowly and in phases, Moody's said on Thursday.

In its Global Macro Outlook 2021-22, Moody's also revised upwards India's GDP forecast for calendar year 2021 to 8.6% growth, up from its earlier projection of 8.1% expansion. The Indian economy had grown by 4.8% in 2019.

Earlier, it had forecast -9.6% contraction for the calendar year 2020.

"India's economy had the biggest contraction, 24% year-over-year in the second quarter (April-June), as a result of a long and strict nationwide lockdown," the rating agency said.

Slow credit intermediation will hamper the pace of recovery because of an already weakened financial sector, Moody's said.