Credit rating agency Moody’s Investors Service on Wednesday slashed India’s growth forecast for the year from the previous estimate of 7.5% to 7.3%, PTI reported. The firm said in its Global Macro Outlook report that the country’s economy was recovering, but higher oil prices and tighter financial conditions would slow down the growth rate.

The agency, however, added that its growth expectation for India for 2019 remained unchanged at 7.5%. An acceleration in rural consumption, aided by higher minimum support prices and a normal monsoon would help the economy grow, it said.

“The private investment cycle will continue to make a gradual recovery, as twin balance-sheet issues – impaired assets at banks and corporates – slowly get addressed through deleveraging and the application of the Insolvency and Bankruptcy Code,” Moody’s added.

The Goods and Service Tax could impede growth in the next few quarters, and that poses risks to the forecast, IANS quoted the firm as saying. “However, we expect these issues to moderate over the course of the year.”

The Indian Oil Corporation revised the prices for petrol and diesel on Wednesday by just one paisa a litre each after increasing them for 16 consecutive days. State-run oil companies had resumed the dynamic pricing mechanism on May 14 after a 19-day gap. Retail prices were frozen between April 24 and May 13, when campaigning was on for the Karnataka Assembly elections. International crude oil prices rose in this period, while the rupee fell against the United States dollar – both factors make fuel costlier. Oil companies are estimated to have lost about Rs 500 crore because of the price freeze in this period.