India’s economy may grow 4.7 per cent in the current financial year, lower than the official estimate of 4.9 per cent, Fitch Ratings has said .
The global rating agency expects the economy to pick up in the next two financial years. India’s economy is expected to grow 4.7 per cent in FY2013-14, slightly up from the recently downward adjusted 4.5 per cent for FY2012-13, Fitch said in its latest Global Economic Outlook.
India’s Central Statistics Office has estimated GDP growth of 4.9 per cent in this financial year. The CSO revised the growth rate downward to 4.5 per cent -- the lowest in a decade -- for the previous financial year from the earlier estimate of 5 per cent on account of subdued performance in agriculture, mining and manufacturing.
Fitch said it cut its real GDP growth forecasts for 2014-15 to 5.5 per cent and for 2015-16 to 6 per cent as investment remains subdued.
“The lower growth forecasts for the coming two years are also based on the premise that monetary policy rates are likely to remain higher for longer in light of the Reserve Bank of India’s stronger resolve to bring down inflation,” it said.
Fitch said the October-December GDP growth of 4.7 per cent was somewhat disappointing as an apparent pick-up in growth in the second quarter of 2013-14 to 4.8 per cent did not materialise in the context of low agricultural growth even after a good monsoon and a record harvest.
Meanwhile, Chairman of Prime Minister’s Economic Advisory Council C Rangarajan said the economy is likely to grow at 5.5 per cent in the fourth quarter of the current fiscal on higher agriculture output and pick up in the manufacturing activities, Prime Minister’s Economic Advisory Council (PMEAC) chairman C Rangarajan said.