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The World Bank downgraded its India's growth outlook citing weak domestic demand and manufacturing sector.
According to South Asia Economic Focus report, India will grow 6.0 in the current fiscal year, down from the previous estimate of 7.5 percent.
Growth is then expected to gradually recover to 6.9 percent in fiscal year 2020/21 and to 7.2 percent in the following year. The outlook for both years were lowered from 7.5 percent projected in April.
The lender observed that India's cyclical slowdown in severe. Manufacturing growth reached below 1 percent in the second quarter of 2019. Although this drop follows the global trend, it was more pronounced.
Growth in South Asia was projected to slow to 5.9 percent in 2019, down 1.1 percentage points from April 2019 estimates.
However, a slight rebound in investment and private consumption could jumpstart South Asia's growth up to 6.3 percent in 2020, slightly above East Asia and the Pacific, and 6.7 percent in 2021, the World Bank said.
