News: India's FY07 growth to slow to 7.9%
(RTR 13/06/2006) Mumbai - India's growth rate is likely to slow to 7.9 per cent in the fiscal year to March 2007 from an earlier forecast of 8.0-8.25 per cent as manufacturing output moderates and farm production dips, a thinktank said on Tuesday.
The Centre for Monitoring Indian Economy (CMIE) said in its monthly report it expected the services sector, which contributes a little more than 50 per cent to gross domestic product, would be the key driver of India's growth.
It forecast services to expand 9.6 per cent in 2006-07, compared with 10 per cent a year earlier.
India's financial year runs from April to March and Asia's third-largest economy has expanded at an average 8 per cent in the past three years. It grew at an estimated 8.4 per cent in 2005-06.
"We expect agricultural and allied activities to grow by 2.5 per cent during 2006-07," CMIE said. "During 2005-06 its growth was better than anticipated at 3.9 per cent. We expect manufacturing to grow at a robust rate of 8.5 per cent against the higher growth of 9 per cent in 2005-06."
Despite a lull in the monsoon, weather department officials expect normal rains this year. This would help crops, which mainly depend on the four-month monsoon for irrigation.
This would also boost rural incomes of 600 million Indians who live off the land, a major driver of consumption and so industrial output.
India's industrial output in April rose a higher-than-expected 9.5 per cent from a year earlier, data showed on Monday, boosted by consumer spending on items such as cars and televisions. It was the fastest pace of expansion since October 2005.
Manufacturing, which makes up more than three quarters of industrial production, increased 10.4 per cent from a year earlier, compared with 8.9 per cent in March and 9.5 per cent in February.
CMIE said Indian industry was investing heavily to expand operations or build new ventures, with a survey it conducted showing fresh investments at Rs 1.57 trillion ($34.1 billion) in the April 2006 quarter.
The outstanding investment in all industries at the end of April was 28.7 trillion rupees, 43.5 per cent higher than a year earlier, it said.
The Centre for Monitoring Indian Economy (CMIE) said in its monthly report it expected the services sector, which contributes a little more than 50 per cent to gross domestic product, would be the key driver of India's growth.
It forecast services to expand 9.6 per cent in 2006-07, compared with 10 per cent a year earlier.
India's financial year runs from April to March and Asia's third-largest economy has expanded at an average 8 per cent in the past three years. It grew at an estimated 8.4 per cent in 2005-06.
"We expect agricultural and allied activities to grow by 2.5 per cent during 2006-07," CMIE said. "During 2005-06 its growth was better than anticipated at 3.9 per cent. We expect manufacturing to grow at a robust rate of 8.5 per cent against the higher growth of 9 per cent in 2005-06."
Despite a lull in the monsoon, weather department officials expect normal rains this year. This would help crops, which mainly depend on the four-month monsoon for irrigation.
This would also boost rural incomes of 600 million Indians who live off the land, a major driver of consumption and so industrial output.
India's industrial output in April rose a higher-than-expected 9.5 per cent from a year earlier, data showed on Monday, boosted by consumer spending on items such as cars and televisions. It was the fastest pace of expansion since October 2005.
Manufacturing, which makes up more than three quarters of industrial production, increased 10.4 per cent from a year earlier, compared with 8.9 per cent in March and 9.5 per cent in February.
CMIE said Indian industry was investing heavily to expand operations or build new ventures, with a survey it conducted showing fresh investments at Rs 1.57 trillion ($34.1 billion) in the April 2006 quarter.
The outstanding investment in all industries at the end of April was 28.7 trillion rupees, 43.5 per cent higher than a year earlier, it said.
posted by InCar Group Press Room at 17:15
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