Washington: After averaging at 8.8% growth over the past four years, India’s growth rate in 2009-10 is expected to slow down to 5.5% mainly due to lower investment and declining external demand, the US Treasury secretary Timothy Geithner has said.
“(India’s) growth is expected to slow to around 5.5% in FY 2009-10 (April-March) due to credit conditions and weaker external demand,” Geithner said in the India section of his semi-annual report on International Economic Exchange Rate Policies.
The recently-announced policy measures to stimulate the economy and ease credit conditions should help cushion the downturn, he hoped.
Growth is slowing largely due to lower investment (reflecting tighter financing conditions and uncertainty) as well as declining external demand, although India is less export dependent than many Asian economies.
It said year-over-year growth slowed to 5.3% during the fourth quarter of 2008, compared with 8.9% in the same quarter in 2007; but on a seasonally-adjusted annualised basis, the economy contracted 2.9% in the fourth quarter, the first contraction since early 2004.