India’s GDP growth dips to 7.9 %

Posted on August 28, 2008. Filed under: Economics | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

Taming Inflation Moderating Growth

Taming Inflation Moderating Growth

The rating agency, Moody has projected that India’s economic growth would decelerate to 7.9 % in the current fiscal from 9 % in 2007-08, on the backdrop of rising interest rates and slow credit growth. Led by the easing domestic demand, the private consumption growth is also likely to decline to 5 %. Moody’s economist Sherman Chan said, “Strong inflation will also squeeze household budgets, hurting consumption growth in real terms.”

 

 

 

Earlier this month PM’s Economic Advisory Council has made a similar forecast, predicting GDP growth at 7.7 %. The research arm of the Economist magazine, economic intelligence unit, has estimated India’s economic growth at 7.5 % this fiscal. In a presentation to economic advisors in various ministries, Finance ministry’s chief economic advisor Arvind Virmani said the inflation rate should return to normal levels in a year’s time. In March the economy is likely to grow at 8-9% this fiscal. Monetary tightening to control double digit inflation is likely to moderate growth. According to Moody also the situation next year is likely to improve.

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