Morgan Stanley cuts growth forecast for India

US investment bank Morgan Stanley today cut its growth forecast for India for the current fiscal year as also for the next due to the rapidly deteriorating near term growth outlook, for the third biggest economy in Asia.

According to analysts Chetan Ahya and Upasana Chachra, who authored the report, India's growth, which was holding up well until the quarter ended March, was showing clear signs of slowdown over last 3 to 4 months, with car sales, two-wheeler sales, retail sales, investment and construction spending appearing to be moderating.

According to the bank, India would experience its worst period of growth since the global credit crisis and support from all  major growth drivers for the economy would decline simultaneously, according to the bank.

The bank's estimates for gross domestic product for fiscal year ending March 2012 were down to 7.2 per cent from 7.7 per cent while that for 2012-13 retreated to 8 per cent from 8.5 per cent.

Last month, Standard Chartered Bank had similarly cut its FY12 growth forecast to 7.7 per cent from the earlier 8.1 per cent.

For the current fiscal, the RBI had estimated a more optimistic 8 per cent growth.