Moody's cuts India's GDP growth to 5.6% for 2019

Moody's expected economic activity to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively.

Illustration: Uttam Ghosh/Rediff.com

Moody's Investors Service on Thursday cut India's economic growth forecast for current year to 5.6 per cent from 5.8 per cent estimated earlier, saying GDP slowdown is lasting longer than previously expected.

"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," it 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.

"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.