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| Goldman raises FY11 GDP to 7.8%, sees inflation rising |
| Press Trust of India / Mumbai Aug 10, 2009, 19:15 IST |
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Global investment banking firm, Goldman Sachs, today raised India's GDP growth forecast to 7.8 per cent for fiscal 2011 from 6.6 per cent based on a better investment outlook and external environment and recovery in demand.
"We are raising our FY 11 GDP growth forecast significantly to 7.8 per cent from 6.6 per cent due to a much improved investment outlook, espcially for infrastructure, a recovery in consumption demand, and a better external environment," Goldman Sachs said in a note.
It also attributed this to several Indian companies raising capital through Qualified Institutional Placements (QIPs).
Besides, revival in capex plans in power, roads, energy and materials among other sectors due to credit availability has brightened prospects.
"A low base in agriculture from FY 10 also contributes to our above consensus growth expectations," it added.
However, growth expectations for the current fiscal remained unchanged at 5.8 per cent as "a poor monsoon and its negative impact on rural demand in the near term, takes away the upside from a large loosening of financial conditions," the investment bank said.
It pegged India's inflation target for end of FY 10 at 6.5 per cent, with risks firmly to the upside.
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