Mumbai, Dec 16 (IANS): After cutting India's sovereign ratings recently, Moody's Investor Services on Monday cut India's growth forecast to 4.9 per cent for 2019-20 due to subdued consumer demand.

The US ratings multinational revised downwards its growth forecast for India to 4.9 per cent from 5.8 per cent in 2019-20.

It also lowered the growth forecast for FY2020-21 to 6.3 per cent from an earlier prediction of 6.6 per cent.

"The deceleration began as an investment-led slowdown, and has now broadened into consumption, with financial stress among rural households and weak job creation among the key drivers of the weaker conditions," Moody's said in a report on consumption trends.

"A credit crunch among NBFIs, which have been major providers of retail loans in recent years, has exacerbated the slowdown. While household consumption has been the bulwark of growth, making up about 57 per cent of GDP in the fiscal year ended March 2019, recent consumption trends point to a weaker pace of economic expansion compared with the recent past."

As per the report, the agency expects a modest cyclical recovery next year; however, growth will be weaker than in the recent past.

"The slowdown in household demand will have negative credit implications for Indian issuers in a range of sectors," the report said.