New Delhi (NVI): A week after diluting its outlook on India’s ratings to “negative” from “stable”, the Moody’s today also lowered the 2019 growth forecast for the country a notch to 5.6% from 5.8% estimated by it last month citing decelerating consumer demand.
Moody’s Investors Service lowered its forecast for India for the current financial year, saying GDP slowdown in the country is lasting longer than previously expected. India’s economy expanded 5 per cent in the first quarter of financial year 2019-20, which marked the slowest pace of growth in more than six years.
“We have revised down our growth forecast for India. We now forecast slower real GDP growth of 5.6 per cent in 2019, from 7.4 per cent in 2018,” the global ratings agency said.
It expected economic activity to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively, but the pace to remain lower than in the recent past.
“India’s economic growth has decelerated since mid-2018, with real GDP growth slipping from nearly 8 per cent to 5 per cent in the second quarter of 2019 and joblessness rising,” it said.
“Investment activity was muted well before that, but the economy was buoyed by strong consumption demand. What is troubling about the current slowdown is that consumption demand has cooled notably,” it said.