CMIE lowers growth forecast for 2008-09

Economic think tank Centre for Monitoring Indian Economy (CMIE) has said it is expecting the economy to recover in the fourth quarter with a real GDP growth of 7.7 per cent as a slew of measures taken by the government and the Reserve Bank of India (RBI) will help maintain growth.

"Timely corrective measures taken by the government and the RBI have restored liquidity. Recent measures have also provided some industry-specific sops," the Centre for Monitoring Indian Economy said in its monthly review here.

"The monetary and fiscal interventions cannot solve the full impact of the global liquidity crisis. But these are expected to reduce the pain faced by the industry," the monthly review said.

"Fiscal 2008-09 is expected to end with a growth of 7.5 per cent. This is much lower than our earlier forecast of 9.4 per cent that has been revised progressively since the global liquidity crisis to 8.7 per cent and 8.2 per cent in October and November 2008, respectively," the monthly review said.

Real GDP grew by a respectable 7.8 per cent in the first half of FY09, which was lower than its expectations but, it was nevertheless in line with its view that the economy was growing at a healthy pace and that fears of a slowdown were misplaced, CMIE said.

The agricultural sector grew by 2.7 per cent during the quarter ended September 2008, lower than CMIE's expectations.