New Delhi: The Indian economy is likely to grow 6.5 to 7.5% in FY10, if the global economy comes out of the slump later this year and as government stimulus starts working, rating agency ICRA said in a report.
Last week, the central bank forecast a 6% expansion in Asia’s third largest economy but private analysts have pegged growth lower than that, as uncertainties linger across the globe even after a raft of rate cuts and fiscal stimulus measures.
“....It is our view that the Indian economy will likely grow by 7% plus/minus 0.5 % in the fiscal year 2009/10,” it said.
“This is based on the assessment that the US economy will start to show signs of growth in third quarter of 2009, which will strengthen overall global activity.”
ICRA also assumes a normal monsoon and the new government puts in place a “coherent and supportive” policy after the April/May elections.
ICRA said India’s economic growth could be a modest 6.5% in the first half of FY10, with a 4% expansion in industrial output and close to 9% growth in services sectors.
The economy could later accelerate to 7.5% growth in the second half of FY10, it added.
Earlier, the government estimated gross domestic product to have grown 7.1% in FY09, slowing from 9% or more in the previous three years as high borrowing costs and later a global slump trimmed output.
The prime minister has however reiterated FY09 growth could fall short of 7 % after final figures are collated.