ID :
16884
Sun, 08/24/2008 - 23:14
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http://m.oananews.org//node/16884
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EIU lowers economic growth forecast for India to 7.5 pc
panel lowering the economic growth projection for 2008-09, the research arm of London-based Economist has scaled down the expansion to 7.5 percent this fiscal from its earlierforecast of 7.7 percent.
"The moderation in growth would be on account of issues like tight monetary policy and some global factors, including rising prices of oil and commodities," EIU (India) DirectorResearch Manoj Vohra told PTI.
The PM's Economic Advisory Council (E.A.C.) recently revised its GDP forecast for the current fiscal to 7.7 percent from 8.5 percent projected earlier in the wake of slow down inindustrial production and global financial turbulence.
India's GDP, which grew by 9 percent in 2007-08, is expected to fall further in 2009-10 to 6.8 percent, Vohra said, adding "the long-term growth story remains intact and2010-11 will see resurgence in growth".
The RBI, too, in its first quarterly review of the monetary policy, had moderated India's growth outlook to 8percent from 8-8.5 percent projected earlier.
Delhi-based think tank National Council for Applied Economic Research (N.C.A.E.R.) expects the economy to grow by 7.8 percent, against the earlier projection of 8.8 percent in view of the slowdown in growth momentum because of factors like high inflation, rising interest cost andspiralling oil prices.
Justifying the moderation in economic growth, Vohra said industrial production would be affected on account of measurestaken by the banking regulator to squeeze money supply.
Tight monetary policy, he added, will also hit corporateearnings and their expansion plans.
Further elaborating on the reasons of moderation in economic growth, Vohra said it would be primarily on account of domestic factors like rising interest rates though global factors will have some implications. Rising inflation, oil and commodity prices will also attribute to further moderation ingrowth.
As regards inflation, he said that it is likely toaverage 7.1 percent in 2008-09.
He said the effect of the banking regulator's tight monetary measures is likely to show some result in the nextfiscal.
However, the PM's E.A.C. had said inflation was mainly due to rising global commodity prices and could cool off to 8-9 percent by March 2009 by coordinated policy action whilemaintaining that tight monetary stance was necessary.
"The moderation in growth would be on account of issues like tight monetary policy and some global factors, including rising prices of oil and commodities," EIU (India) DirectorResearch Manoj Vohra told PTI.
The PM's Economic Advisory Council (E.A.C.) recently revised its GDP forecast for the current fiscal to 7.7 percent from 8.5 percent projected earlier in the wake of slow down inindustrial production and global financial turbulence.
India's GDP, which grew by 9 percent in 2007-08, is expected to fall further in 2009-10 to 6.8 percent, Vohra said, adding "the long-term growth story remains intact and2010-11 will see resurgence in growth".
The RBI, too, in its first quarterly review of the monetary policy, had moderated India's growth outlook to 8percent from 8-8.5 percent projected earlier.
Delhi-based think tank National Council for Applied Economic Research (N.C.A.E.R.) expects the economy to grow by 7.8 percent, against the earlier projection of 8.8 percent in view of the slowdown in growth momentum because of factors like high inflation, rising interest cost andspiralling oil prices.
Justifying the moderation in economic growth, Vohra said industrial production would be affected on account of measurestaken by the banking regulator to squeeze money supply.
Tight monetary policy, he added, will also hit corporateearnings and their expansion plans.
Further elaborating on the reasons of moderation in economic growth, Vohra said it would be primarily on account of domestic factors like rising interest rates though global factors will have some implications. Rising inflation, oil and commodity prices will also attribute to further moderation ingrowth.
As regards inflation, he said that it is likely toaverage 7.1 percent in 2008-09.
He said the effect of the banking regulator's tight monetary measures is likely to show some result in the nextfiscal.
However, the PM's E.A.C. had said inflation was mainly due to rising global commodity prices and could cool off to 8-9 percent by March 2009 by coordinated policy action whilemaintaining that tight monetary stance was necessary.
