Moody's cuts India outlook to negative, predicts 'prolonged slower growth'

Moody's projects a budget deficit of 3.7% of GDP in the year through March 2020, a breach of the government's target of 3.3%.

India’s credit ratings outlook was cut to negative by Moody’s Investors Service, the first step toward a downgrade, as concerns mount the economic slowdown will be prolonged and debt will rise.

Moody’s projects a budget deficit of 3.7% of gross domestic product in the year through March 2020, a breach of the government’s target of 3.3%, as slower growth and a surprise corporate-tax cut curbs revenue. The foreign currency rating was retained at Baa2, the second-lowest investment grade score.

India’s growth outlook has deteriorated sharply this year, with a crunch that started out in the shadow banking industry spreading to