Mumbai: Moody's Investors Service on Friday said it has lowered its 2019 GDP growth forecast for India to 5.6% as slow employment growth weighs on consumption.
It expects economic growth to pick up in 2020 and 2021 to 6.6% and 6.7% 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%, which is lower than 7.4% 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% to 5% in the second quarter (April-June) of 2019," it noted.
It further slipped to 4.5% 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% and 6.7%, respectively, but the pace of growth will remain lower than in the recent past."
Moody's said fiscal measures undertaken by the government - such as corporate tax rate cuts, bank recapitalisation, infrastructure spending plans, support for the auto sector and others - do not directly address widespread weakness in consumption demand, which has been the chief driver of the economy.