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Ratings Agency Moody’s Cuts 2019-20 GDP Forecast For India To 5.8%

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On Thursday, Moody's Investors Service cut gross domestic product (GDP) forecast for India from the earlier estimated 6.2 percent to 5.8 percent for the financial year 2019-20. The credit rating provider said that the deceleration was on account of an investment-led slowdown than broadened into consumption.

Ratings Agency Moody’s Cuts 2019-20 GDP Forecast For India To 5.8%
 

"What was an investment-led slowdown has broadened into consumption, driven by financial stress among rural households and weak job creation. A credit crunch among non-bank financial institutions (NBFIs), major providers of retail loans in recent years, has compounded the problem," it said.

It expects growth to pick up to 6.6 percent in 2020-21 and around 7 percent over the medium term.

It also diminished the probability of sustained real GDP growth at or above 8 percent.

For the first quarter of the current financial year, India had reported its GDP growth at 5 percent, the slowest in 6 years.

Last week, after the monetary policy committee meet, the Reserve Bank of India (RBI) cut the country's growth forecast for 2019-20 from the earlier estimated 6.8 percent to 6.1 percent.

Read more about: moodys gdp
Story first published: Thursday, October 10, 2019, 13:06 [IST]
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