labels: Centre for Monitoring Indian Economy
Economy to grow at 9.5 per cent in 2008-09: CMIE news
15 April 2008

Mumbai: The Indian economy will grow at 9.5 per cent in the current fiscal (2008-09), aided mainly by growth in the industrial sector, the Centre for Monitoring Indian Economy (CMIE) said in its monthly projection.

CMIE said the slower growth towards the second half of the previous fiscal was an aberration and expected growth to rebound this year.

While the government revised growth estimates for 2007-08 downward to 8.7 per cent from 9.6 per cent in the previous fiscal and expected current year growth to be still lower, CMIE has painted a rosy picture of the Indian economy with the expansion at 10.4 per cent for fiscal 2009.

CMIE attributed the current slowdown in industrial production to supply constraints in sectors like cement, aluminum, electricity and steel.

"We expect industrial production to grow at 10.4 per cent in 2009 fiscal. The current investment boom is expected to correct the slowdown problem," it said.

"Our optimism stems from the fact that capacity addition in India continues with more and more fresh investments getting announced quarter after quarter," CMIE said.

It expects India's gross capital formation to increase by 15.5 per cent in 2009 and continue to drive growth in its GDP.

Manufacturing and construction industries will power the economy in 2008-09, it said. While service sector will grow at 10.6 per cent, industry is expected to grow at 11.4 per cent and agriculture by 2.9 per cent, it said.

Growth of industrial production in the country slipped to 5.3 per cent in January 2008, compared to 11.6 per cent in January 2007, as growth in all major sectors comprising manufacturing, electricity and mining declined.

Real GDP is expected to grow at 8.9 per cent in 2008 and 9.1 per cent in 2009, CMIE said. The projection of a 9.1 per cent growth in real GDP in 2009 is based on the assumption of an adequate precipitation during the monsoon.

India's real GDP grew at 7.5 per cent in 2005, at 9 per cent in 2006 and at 9.6 per cent in 2007.

CMIE expects average inflation to climb to about 5.5 per cent in 2008-09 from 4.5 per cent in 2007-08.


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Economy to grow at 9.5 per cent in 2008-09: CMIE