Moody's Lowered India's GDP Growth Prediction

Experts from various segments and corners are now talking about an economic slowdown has entered here, Now a leading a US rating agency, Moody’s Investors Service has lowered India’s Gross Domestic Product (GDP) growth forecast from 6.8 per cent to 6.2 per cent for 2019.

The rating agency also revised downwards its growth forecast for 16 economies in the Asia-Pacific region which is a major indication of the health of the economy in the Asia-Pacific region.

The economies include Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Mongolia, New Zealand, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

“The moderation in business sentiment and slow flow of credit to corporates have contributed to weaker investment in India,” a Moody’s release said.

It said that the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.

In December last year, Moody’s had said that India’s real GDP was expected to grow at 7.2 per cent in the year ending March 2019 and 7.4 per cent in the following year, driven by investment growth and strong consumption.

The report said externally oriented economies in the region saw a sharper slowing during the first six months of 2019, while domestic factors have had a greater influence on growth in India, Japan and the Philippines.

Of the 16 economies surveyed, Hong Kong and Singapore have shown particularly weak expansion this year, with very large deteriorations in real GDP growth when compared to the first half of 2018.

“In particular, softer capital formation has mirrored the weakening in exports, especially for trade-reliant economies such as Korea and Hong Kong,” it said.