Nomura Financial Advisory & Securities on Monday revised India''s GDP growth downward to 6.8 per cent from earlier projection of 7.2 per cent amidst recessionary pressure being faced by many nations. It also expects growth to start falling sharply from the third quarter of the current fiscal.The erstwhile investment bank Lehman Brothers India said in a report that the main reasons for slowdown are slumps in exports and capex and expected second-round effects.
For 2009-10, GDP growth projection has been slashed sharply to 5.3 per cent against the previous forecast of 6.9 per cent. The expectation of economic expansion to return towards the trend growth rate of 8.0 per cent is only by early 2011.
It said that the global financial crunch took a distinct turn for the worse in September and there are increasing signs of non-linear economic effects vicious negative spirals from falling asset prices, sagging confidence, rising job losses, tightening lending standards and weakening demand, as well as increasing multiplier effects on domestic demand from the slump in exports. In the worst case the report expects the GDP growth rate to come down as low as 4.5 per cent in the first quarter of the next fiscal.
For 2009-10, GDP growth projection has been slashed sharply to 5.3 per cent against the previous forecast of 6.9 per cent. The expectation of economic expansion to return towards the trend growth rate of 8.0 per cent is only by early 2011.
It said that the global financial crunch took a distinct turn for the worse in September and there are increasing signs of non-linear economic effects vicious negative spirals from falling asset prices, sagging confidence, rising job losses, tightening lending standards and weakening demand, as well as increasing multiplier effects on domestic demand from the slump in exports. In the worst case the report expects the GDP growth rate to come down as low as 4.5 per cent in the first quarter of the next fiscal.
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