Citigroup forecasts India’s GDP at 7.5%

Posted on September 2, 2008. Filed under: Business, Economics | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , |

Citigroup has forecasted that investment trend and growth rate in India may weaken as the impact of monetary tightening sets in, with the current fiscal GDP projected at 7.5%. The investment banking giant Goldman Sachs is more optimistic about the situation. They have projected a GDP growth rate of 7.8% for the current fiscal year.

Citigroup in its latest report Indian Eco Flash notified that it has revised previous 2008-09 estimates from 7.7% to 7.5%.However Goldman Sachs in its latest report said “in 2008-09, slowing investment demand will likely be offset by a large fiscal stimulus through greater spending on rural employment scheme, debt waiver scheme to farmers and wage hikes to government servants.”

The Indian economy expanded by a slower 7.9% in the first quarter of the current fiscal as rising interest rates hit manufacturing and other sectors of the economy. But the situation is predicted to get worse in future. Goldman Sachs expects growth to slow further to 7.2% in 2009-10, due to a weak investment outlook due to much higher interest rates, continued moderation of consumer demands and reduction in fiscal stimulus post Lok sabha election next year

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