ADB lowers India's FY12 growth forecast to 5.4%
2012-12-07 14:23:30
The Asian Development Bank (ADB) on Friday lowered India's growth forecast for the fiscal year 2012 to 5.4 percent, hardly two months after it had made a projection of 5.6 percent growth for the Asia's third largest economy.
ADB, in its Supplement to the 'Asian Development Outlook (ADO) 2012' released on Friday, said, "India's growth forecast is revised from 5.6 percent to 5.4 percent in fiscal year 2012 and from 6.7 percent to 6.5 percent in FY 2013."
This is the fourth time that the bank has slashed growth estimates for India.
In the ADO released in April, ADB had projected India to grow at seven percent, lowered to 6.5 percent in July and further to 5.6 percent in the ADO October update, citing falling global demand and impact of the delayed monsoon on agricultural production.
As regards developing Asia, which comprises 45 nations, ADB lowered its 2012 growth forecast marginally to six percent from 6.1 percent. It also revised downward the growth outlook for 2013 to 6.6 percent from 6.7 percent projected earlier.
The growth performance in the developing Asia has remained subdued so far with downside developments slightly outweighing positive events, ADB said, adding "the region should pick up steam in 2013".
India's economy has slowed in recent years on the back of both domestic and global factors. Economic growth fell to a nine-year low of 6.5 percent in the 2011-12 fiscal and is expected to be 5.8 percent in the current fiscal, according to RBI estimates.
In the first half of the current fiscal, the economy grew by 5.4 percent, compared to 7.3 percent in the same period last fiscal.
Credit Suisse has lowered India's economic growth forecast marginally to 5.9 percent from the 6 percent for the fiscal year ending March. It has also reduced its growth forecast for FY14 to 6.9 percent from the 7.2 percent.
On the contrary Goldman Sach expected India's GDP growth to grow to 7.2 percent in 2014 from the 5.4 percent in 2012, and remain high through 2015-2016.
Even Morgan Stanley raised India's FY13 GDP growth forecast to 5.4 percent from the 5.1 percent, citing better-than-expected GDP growth for the September quarter and also the stabilization in non-agriculture growth indicators