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Economy08/02/2012  02:41 PM

CRISIL Expects India GDP In FY13 To Grow At 7.0%

Indias GDP growth for the first time after the global crisis of 2008 will slip below 7%, as per the CRISIL Researchs analytical note. As the GDP growth during first-half of FY12 stands at 7%, GDP growth in the second half will be lower than the first half. According to the report, hit by the global headwinds and high interest rates, industry is expected to grow at 3.9 per cent in FY12. However, services sector growth is expected to do well and is pegged at 9.4 per cent for FY12.

On the demand-side, due to high interest rates and poor sentiments both consumption and investment growth is expected to decline but the decline will be more pronounced in case of investment growth which is expected to fall from 7.5 per cent in FY11 to 5.6 per cent in FY12, the report states. Lower GDP in FY12 clearly is an outcome of a combination of domestic (policy log-jam, high interest rates, stubborn inflation) and global (sovereign debt crisis in EU) factors. Going forward although the research firm expects inflation and interest rates to ease, global environment still looks uncertain. Hence, CRISIL expects GDP in FY13 to grow at 7.0 per cent.

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