Amidst recessionary pressure being faced by many nations Nomura Financial Advisory & Securities today revised India’s GDP growth downward to 6.8 per cent from earlier projection of 7.2 per cent and expects growth to start falling sharply from the third quarter the current fiscal.
“The main reasons for slowdown are slumps in exports and capex and expected second-round effects,” erstwhile investment bank Lehman Brothers India said in a report.
During 2009-10, GDP growth projection has been slashed sharply to 5.3 per cent against the previous forecast of 6.9 per cent.
However, it expect economic expansion to return towards the trend growth rate of 8.0 per cent only by early 2011.
The global financial crunch took a distinct turn for the worse in September and there are increasing signs of non-linear economic effects vicious negative spirals from falling asset prices, sagging confidence, rising job losses, tightening lending standards and weakening demand, as well as increasing multiplier effects on domestic demand from the slump in exports, it said.
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