Moody's Investors Service on Friday cut India's GDP growth forecast for 2019 calendar year to 6.2percent from the previous estimation of 6.8percent, saying the economy remains sluggish due to a combination of factors such as weak hiring, distress among rural households and tighter financial conditions.
For 2020 calendar year, it reduced the estimate by a similar by a similar 0.6 percentage points to 6.7percent.
Announcing revision in its growth forecast for 16 Asian economies, it said weaker trade and investment weigh on GDP growth, despite stable private and public consumption in the region.
"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 due to stress among non-bank financial institutions," it said.
Stating that domestic factors have had a greater influence on growth in India, Moody's said the moderation in business sentiment and slow flow of credit to corporates have contributed to weaker investment in the country.
"Cooler business sentiment and slow flow of credit to corporates contribute to weaker investment in India," it said.
Indian economy had expanded by 6.9 percent in 2017 and 7.4 percent in 2018, according to Moody's.
GDP growth rate had hit a five-year low of 5.8 percent in the January-March quarter and the government is...