Moody's cuts growth forecast

New Delhi: Moody's Investors Service on Friday said it has lowered its 2019 GDP growth forecast for India to 5.6 per cent as slow employment growth weighs on consumption.

It expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively but sees the pace of growth remaining lower than past. "We have lowered our 2019 gross domestic product (GDP) growth forecast for India to 5.6 per cent, which is lower than 7.4 per cent growth in 2018," Moody's said in a report.

"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 (April-June) of 2019," it noted. It further slipped to 4.5 per cent in July-September quarter.

"Consumption demand has cooled notably, with slow employment growth weighing on consumption," it said. "We expect economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively, but the pace of growth will remain lower than in the recent past," it added.