India to see further deceleration in growth: Moody's

India's economic growth may decelerate considerably in 2009 amid a moderation in both external and domestic demand, an arm of rating agency Moody's said today.

"...The pace of growth is expected to decelerate considerably amid a moderation in both external and domestic demand," Moody's economy.com economist Sherman Chan said in a note.

"The Indian economy will continue to expand in 2009 but at a notably slower pace," Chan added.

Further, Chan expects RBI to continue easing monetary policy, even as she ruled out another sizeable fiscal stimulus from the cash- strapped government.

Year-on-year GDP growth moderated sharply from 7.6 per cent in the September quarter 2008 to 5.3 per cent in the following quarter reflecting the economy was losing momentum.

Chan said moderation confirmed "that the emerging giant is not immune from the global downturn although it is more domestic-oriented compared with its Asian peers".

The agriculture sector, which supports 60 per cent of the population, contracted 2.2 per cent in the last three months of 2008 from a year ago. The manufacturing sector also shrank in the December quarter, though only mildly by 0.2 per cent.

"External orders have been declining while domestic demand has also eased," Chan said.