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Moody's revises downwards India's GDP growth forecast to 6.2% for 2019

26 Aug 2019 Evaluate

Moody's Investors Service in its latest report has revised downwards India's Gross domestic product (GDP) growth forecast to 6.2% for 2019 calendar year. The GDP growth forecast for current year was revised downwards from its previous estimation of 6.8%. The same for 2020 was also lowered by a similar 0.6 percentage points to 6.7%. Indian economy had expanded by 6.9% in 2017 and 7.4% in 2018.

It mentioned that while not heavily exposed to external pressures, India's economy remains sluggish on account of a combination of factors, including weak hiring, financial distress among rural households, and tighter financing conditions on account of stress among non-bank financial institutions. Stating that domestic factors have had a greater influence on growth in India, it said the moderation in business sentiment and slow flow of credit to corporates contributed to weaker investment in the country.

Besides, it stated inflation is expected to rise to 3.7% this year and 4.5% in the next from 2.9% in 2018. It added Reserve Bank of India (RBI) has been most active in cutting rates in support of growth, but lingering financial sector issues may blunt the effectiveness of the monetary stimulus.

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