GDP Growth Forecast for Next Fiscal Decelerates to 5.8% as per Moody Reports

Due to the pronounced economic slowdown experienced in the country, Moody has slashed the GDP growth forecast from 6.2 percent to 5.8 percent for the next fiscal year. Moody attributed the decline in growth rate to the effects of slowdown that are mainly due to domestic reasons and expects this effect to last on a long-term basis. Similarly, RBI and Asian Development Bank and the Organisation of Economic Cooperation and Development have also lowered their growth forecast for FY2020. With the monetary and fiscal stimulus in response to the slowdown in consumption and investment, the Indian economy would take at least about two years to recover. India’s real GDP has declined consistently in the past five quarters, falling to 5 percent year-on-year in April-June 2019. As a result, the government deficit was broadened than was expected by these agencies.