New Delhi: Moody's Investors Service today cut India's economic growth forecast for current year to 5.6% from 5.8% 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 expects economic activity to pick up in 2020 and 2021 to 6.6% and 6.7% respectively, but the pace to remain lower than in the recent past.
Last week, Moody's Investors Service cut India's ratings outlook to "negative" from "stable", citing increasing risks that Asia's third largest economy will grow at a slower pace than in the past.
The ratings agency also cut its outlook for 21 Indian companies, including State Bank of India, Indian Oil Corporation Ltd, Infosys Ltd and NTPC Ltd to "negative" from "stable".
However, Moody's retained the country's foreign and local currency ratings at 'Baa2'.
India's economy grew 5% year-on-year between April and June, its weakest pace since 2013, which had prompted a slew of interest rate cuts by the central bank and forcing the government to cut corporate taxes sharply. The second quarter GDP data will be released later this month.
Data released on Monday showed factory output contracting by 4.3% in September. Later, economists at the nation's largest bank SBI on Tuesday sharply slashed GDP forecast for the full year to 5%.
SBI Research attributed their lower projection to the pluniging automobile sales, deceleration in air traffic movements, flattening core sector and declining investment in construction and infrastructure.
Japanese brokerage Nomura expects GDP to grow at 4.9% for the year to March, the lowest projection so far.