The Hindu : Crisil puts growth at 7.1 p.c.

Online edition of India's National Newspaper
Tuesday, Nov 11, 2003

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Crisil puts growth at 7.1 p.c.

By Our Special Correspondent

NEW DELHI NOV. 10. The Credit Rating Information Services of India (Crisil) today forecast that the Indian economy would grow by 7.1 per cent this fiscal after the excellent monsoon although the fiscal deficit may overshoot the target.

"The gross domestic product (GDP) growth in 2003-04 is expected at 7.1 per cent,'' Crisil's Chief Economist, Subir Gokarn, told presspersons here. The agricultural sector was expected to grow at 7.3 per cent on the back of a robust growth in the third quarter, he said adding industry was likely to post a 6.3 per cent growth while the service sector was expected to grow by 7.5 per cent. On quarterly estimates, he said after the first quarter growth of 5.7 per cent, the economy would grow by 6.3 per cent in the second quarter, 7.9 per cent in the third and 8.2 per cent in the fourth quarter.

Crisil's 7.1 per cent GDP growth forecast is in line with the recent forecast by the Reserve Bank of India (6.5-7 per cent), the National Council of Applied Economic Research (6.6-7 per cent), the Centre for Monitoring of the Indian Economy (7.4 per cent), the Investment Credit Rating Agency (6.5-6.9), the Hong Kong and Shanghai Bank (7.5), the International Monetary Fund (5.6) and the Asian Development Bank (6). All the agencies have already upgraded the projected growth rate following abundant rainfall this year.

Projecting a below 10 per cent export growth against a target of 12 per cent, Crisil said the rupee was expected to remain in the range of Rs. 45-46 to the U.S. dollar in the current monetary and interest rate scenario. Forecasting the fiscal deficit to be at 5.8 per cent of the GDP against the official target of 5.6 per cent, Mr. Gokarn said the average inflation, which was now hovering at about 4.8 per cent, would end the fiscal at 2.9 per cent.

Crisil also said that the current revival of the manufacturing sector was likely to be sustained in the medium term as the revival was getting strength from retail finance and the construction sector whose growth was sustainable over the medium term.

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