Global financial services major Bank of America Merrill lynch on Monday said Indian economy is recovering at a much slower-than-expected pace, but faster enough to overtake Brazil and Russia to become the second largest emerging market after China.
The firm on Monday also trimmed its growth forecast for India to 5.5 per cent from 6 per cent for the current fiscal, as per the old GDP series. As per the old series, the base year for calculation of national accounts was 2004-05.
“Is recovery happeningIJ Yes, but even more slowly than we expected. At the same time, India's relatively faster growth is allowing it to overtake Brazil and Russia in GDP to emerge as the second largest emerging market after China,” BofA-Ml said in a note.
The Central Statistics Office (CSO) has now adopted the new series of National Accounts with 2011-12 as base year and subsequently revised the GDP growth rate to 6.9 per cent in 2013-14 from 4.7 per cent and 5.1 per cent in 2012-13 from 4.5 per cent.
The RBI has also lowered its economic growth forecast for the current fiscal to 7.4 per cent from its previous projection of 7.6 per cent. The April-June quarter GDP slipped to 7 per cent from 7.5 per cent in the preceding quarter.
“We have cut our GDP forecasts to 5.5 per cent from 6 per cent for 2015-16.”