S&P cuts India’s growth forecast to 5.5 %

Rating agency Standard & Poor's today lowered India's GDP growth forecast to 5.5 per cent from the earlier 6.5 per cent despite a slew of policy measures announced by the government recently.

Earlier, Indian rating agency CRISIL too had slashed its forecast for the country's GDP growth to 5.5 per cent from 6.5 per cent for this fiscal (CRISIL cuts GDP projection to 5.5 %). Standard Chartered Bank and HSBC have also cut their growth forecasts for fiscal 2012-2013.

India's Planning Commission also lowered annual average economic growth rate to 8.2 per cent in the 12th Five Year Plan (2012-17) from earlier average economic growth rate of 9 per cent due to lower economic growth and lack of appropriate policy measures.

It may, however, be recalled that in the April-June quarter, India's GDP grew at 5.5 per cent compared to 5.3 per cent in the previous quarter after eight successive quarterly declines.

S&P has also cut China's GDP growth forecast to 7.5 per cent as the entire Asia Pacific feels the pressure of ongoing economic uncertainty.

"Although Asia Pacific has recorded strong GDP growth relative to other global economies, we have observed a continued change in the region's economic barometer," said S&P ratings in a statement.

In its report titled Asia-Pacific feels the pressure of ongoing global economic uncertainty, S&P credit analyst Andrew Palmer said poor monsoon rains have affected India, for which agriculture still forms a substantial part of the economy.