Singapore | Moody’s Investors Service has cut India’s gross domestic product (GDP) growth rate to 6.2 per cent for the year 2019, amid an economic slowdown.
It said the weaker global economy has affected Asian exports and the uncertainty has weighed on investment.
“And with India, the moderation in business sentiment and slow flow of credit to corporates have contributed to weaker investment in the country,” said Moody’s.
“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-banking financial institutions,” it said.
They said that the 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.
The cut in growth rates for India was sharper for both the years than the other seven economies.
They attributed slowing growth rates in India, Japan and the Philippines more to the domestic factors.
For achieving this feat, the economy needs to grow by 8 per cent from the next financial year, according to the Economic Survey.
Moody’s blamed “cooler business sentiment and slow flow of credit to corporate contribute to weaker sentiments in India”.