Moody’s lowers GDP growth forecast

New Delhi: Moody's Investors Service on Tuesday said India's current account deficit is likely to remain low supported by declining oil prices but a slow recovery in industrial output and investment would drag economic growth to seven per cent in the current fiscal.

Moody's also lowered growth forecasts for many Asia Pacific (APAC) sovereigns, citing that subdued global growth, exacerbated by weaker demand from China. "We have also reduced our projections for India to seven per cent in 2015 and 7.5 per cent in 2016, from 7.5 per cent and 7.6 per cent based on high frequency indicators suggesting that the recovery in industrial output and investment is slow, and bank credit growth still subdued," it said.

India's economy grew at seven per cent in the June quarter of the current fiscal. The government expects economy to grow at 8-8.5 per cent in the fiscal ending March 2016. It said for a number of economies in the region, the fall in oil prices has helped to reduce current account deficits. Moody's said India's current account deficit (CAD) has narrowed significantly from 4.8 per cent in 2012 to 1.4 per cent in 2014.

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