New Delhi, Oct 24 (IANS): Global ratings agency Fitch Ratings on Thursday said that it expects India's economic growth to be at 5.5 per cent in 2019-20, due to the large squeeze in credit availability emanating from non-bank financial companies (NBFCs).

Accordingly, the global ratings agency expects economic growth to be 5.5 per cent in 2019-20, before picking up to 6.2 per cent in 2020-21 and 6.7 per cent in 2021-22.

"Nevertheless, growth is likely to be significantly below its potential over the next year or so," the agency said.

According to Fitch Ratings, assuming the sluggish pace of lending is maintained throughout the year, total new lending will amount to only 6.6 per cent of GDP in the fiscal year 2019-2020, down from 9.5 per cent in the previous fiscal year.

However, it noted that recent government measures should gradually improve the flows of credit and nudge up growth.

"Looser global financial conditions are also supportive, with a noticeable pickup in external commercial borrowings in 2019," the agency said.

Recent data showed that India's economy had decelerated for the fifth cons ecutive quarter in the 2Q19, with GDP expanding by a meagre 5 per cent yoy, down from 8 per cent recorded a year earlier.