Credit rating agency Fitch downgraded Indian economy’s GDP growth projection to 8.3% for FY 2011-12. The main reasons for the slowdown in the economy’s growth rate could be high inflation, high interest rate and high cost of inputs, all putting pressure on corporate profitability. Most of the credit agencies like Crisil, StanChart or Asian Development Bank (ADB) are of the same view.
Fitch had earlier projected the GDP growth for the current fiscal FY 2011-12 at 8.5%. India’s economy grew 8.7% in FY 2010-11 as per government’s estimate.
Asian Development Bank (ADB) too lowers India’s GDP growth projection to 8.2% for FY 2011-12. Global banking giant StanChart projects India’s GDP growth to 8.2% for FY 2011-12. This is much below the government’s initial projection of 9 per cent growth in FY 2011-12.
Between FY 2005-06 and FY 2007-08, the Indian economy grew by over 9% annually, before the global economic meltdown had slowed down the GDP growth to 6.8% in FY 2008-09.Google+