The Hindu : New Delhi News : ADB forecasts fluctuation in growth

Online edition of India's National Newspaper
Friday, Apr 08, 2005

New Delhi

New Delhi

ADB forecasts fluctuation in growth

By Our Special Correspondent

NEW DELHI, APRIL 7. Contrary to the World Bank Country Director, Michael Carter's projections, the Asian Development Bank has forecast sharp fluctuation in the GDP growth over the next three years, mainly on account of the change in the fortunes of the industry and the services sector.

In its `Asian Development Outlook' released on Wednesday, the Bank has said that India's economic growth, as measured by the GDP, would be slightly higher at 6.9 per cent in 2005, and following a decline to 6.1 per cent in 2006, it would bounce back to seven per cent only in 2007.

The country's farm growth, it said, would grow to a healthy 4.4 per cent in 2005, while the growth in the industrial sector was likely to slowdown to 6.7 per cent while the services sector would see a growth of about 7.7 per cent.

The industrial slowdown in 2005, ADB has said, would be mainly on account of the "cost smoothing" behaviour of companies to tide over the expected cost escalation as reflected in the latest business confidence survey of India's economic think-tank, National Council of Applied Economic Research. This, it said, is corroborated by the fact that while the companies are very upbeat about capacity use, they are not optimistic about the demand conditions.

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