Goldman Sachs and Bank of America-Merrill Lynch have reduced their respective GDP forecast for India after a similar move by Morgan Stanley earlier this week.

The downgrade comes at a time when the country’s economy is facing increased inflation and a falling national currency, which hit a new low against the dollar. Analysts at Goldman Sachs said that they are reducing gross domestic product forecast for India to 6.6 percent from 7.2 percent for the fiscal year ending in March 2013.

Goldman Sachs said that the decision to lower the forecast is mainly due to a weaker investor climate due to uncertainties in the domestic regulations. It also increased its forecast for wholesale price inflation to 6.5 percent from 5 percent. It said that it expects only 50 basis points in additional cuts of the repo rate for calendar year 2012.

Merrill Lynch reduced its forecast to 6.5 percent from 6.8 percent earlier for fiscal 2012-13 citing the effects of the eurozone debt crisis as the main reason for the downgrade. "We continue to believe that the worst is over, but there is still pain left," Merrill said.