New Delhi, Nov 4 (IANS): The National Council of Applied Economic Research (NCAER) Tuesday lowered India's gross domestic product (GDP) growth forecast in the current fiscal to 5 percent on the basis of weak economic fundamentals and uncertainties surrounding growth prospects.

"NCAER is predicting a slower growth for the economy unlike other forecasts. The fundamentals of the economy remain weak, while uncertainties prevail. The only redeeming feature is the weakening of inflation and FDI inflows," the think tank said in a release here.

"Whether that will help us revive our growth prospects will depend on a number of factors, including revival of the external economy and the extent of damage on agriculture due to deficit rainfall," it added.

The NCAER earlier projected a likely growth of 5.7 percent in 2014-15.

"The economy is giving mixed signals. On one hand, we had the Sensex reaching record levels, partly driven by record foreign institutional investment and FDI," it said.

Cooling of prices with lower food and fuel inflation is positive, but agricultural growth is predicted to be lower than last year owing to rainfall deficit with uneven spatial and temporal patterns, the statement added.

While inflation has weakened significantly and sentiments have improved, the fundamentals of the economy continue to be weak, according to the NCAER.

"The pace of growth shows signs of slowing down in the services sector. Not surprisingly, bank credit to the commercial sector has not picked pace and continues to languish."

"Further, the slowdown in the external economy, except the United States, shows little growth prospects for the external sector even though exports grew in the first quarter," it said.