Mumbai: India will certainly miss its advance estimate of 7% GDP growth for the current fiscal year and this target needs to be substantially revised downward, Moody’s Economy.com said in a note Friday.
Growth is “almost certain” to slow to under 5% in the first half of 2009 and a recovery seems far from sight as the fiscal stimulus does not appear strong enough to foster a rebound, economist Sherman Chan said in a note.
“When global economic conditions begin to improve, India will then see a bottom,” the report added.
Moody’s Economy said the “sharper-than-expected deceleration in the December quarter (where GDP grew 5.3%) perhaps makes up for the slowdown that should have taken place in the September quarter...”
In 2009, it expects a much sharper contraction in industrial activity, while construction activity is seen coming to a standstill amid a slowdown in investment.
Further moderation is expected in trade and tourism-related sectors as exports are set to tumble into negative territory and visitor arrivals will be subdued due to global recession.
The only upside surprise from the (third uarter GDP) data breakdown is the resilience shown in the financial and real estate sectors ... However, the momentum is unlikely to last,” the report said.