Government lowers FY'12 GDP growth projection to 8.6%
20 Jul 2011
The government today lowered its GDP growth forecast for 2011-12 to 8.6 per cent from the earlier estimate of about 9 per cent, as industrial output shows signs of cooling amidst sustained monetary policy tightening.
The finance ministry said, "growth is estimated to be marginally higher at 8.6 per cent this year over 2010-11 levels of 8.5 per cent."
The ministry added that as first quarter growth figures for the current fiscal were still to be released, the outlook for 2011-12 had to be inferred from past data, and higher frequency proxy economic indicators.
While annual indicators of real GDP growth remained positive in 2010-11, there was a "perceptible slowdown" in terms of quarterly growth rates in the last two quarters.
The economy grew by just 8.3 per cent in the third quarter last fiscal and 7.8 per cent in the January-March period, the lowest in five quarters.
"This apparent slowdown in headline year-on-year growth rates on a quarterly basis, plus of movement in other higher frequency indicators... and slowing automobile sales, suggested that growth outlook for 2011-12 may be lower," it added.
