‘Economic growth to fall to 5.8 percent next fiscal’

November 18th, 2008 - 7:07 pm ICT by IANS  

Chennai, Nov 18 (IANS) India’s economic growth would fall to 5.8 percent in 2009-10 mainly due to fall in exports, according to an economic analysis by a global financial services firm.The report by DSP Merrill Lynch said the fall in exports due to recession in the US and European economies would bring down the pace of economic growth.

According to Indranil Sengupta, an economist at DSP Merrill Lynch, zero export growth is sufficient to pull GDP (gross domestic product) growth down 150 basis points.

It added that economy would grow at 7.3 percent this fiscal.

However, the report said the financial bailout packages, to be announced by various governments, would help the economy rebound in the near future and Indian economy would regain its growth momentum in 2010-11.

“The Indian GDP is expected to touch 7.5 percent growth in FY11,” the report said.

According to the report, the agricultural sector is relatively stable as the global economic downturn would mainly affect the industrial sector, which is export oriented.

The slowdown in industry will have its effects in sectors like construction, trade, hotels, transport and communications, it added.

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