The real GDP expansion is projected to slowdown to 6.9% in the September quarter on a year-on-year basis from 7.7% growth clocked in three months ended June. According to Nomura, the lower growth would be on account of broad-based slowdown in private consumption, fixed investment and exports
New Delhi: India is expected to see a real gross domestic product (GDP) growth of 6.9% in September quarter while the “downside risk” for the economy has increased amid prolonged turbulence in the global financial markets, reports PTI.
“We expect real GDP growth to remain below potential and inflation to moderate as tight monetary policy and weaker global growth cap demand,” global financial services group Nomura has said.
The real GDP expansion is projected to slowdown to 6.9% in the September quarter on a year-on-year basis from 7.7% growth clocked in three months ended June.
According to Nomura, the lower growth would be on account of broad-based slowdown in private consumption, fixed investment and exports.
“Although we expect GDP growth to rise in 2012, the downside risk to the economy has risen, mainly due to prolonged turbulence in global financial markets,” the report noted.
Regarding price rise, the report said that headline WPI (Wholesale Price Index) is expected to remain over 9% this month and moderate to about 8% in December.
Last month, WPI stood at 9.7%.
“Our view is that the RBI (Reserve Bank of India) will stay on hold as we also expect inflationary pressures to wane and growth slowdown to broaden in coming months,” Nomura said.
RBI has hiked interest rates 13 times since March 2010 to tame demand and curb inflation.
“On the fiscal front, rising subsidies and lower revenues should result in a higher fiscal deficit of 5.5% of GDP in FY 11-12 versus a budget estimate of 4.6%,” the report noted.
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