CMIE raises 2007-08 GDP growth forecast to 9.1 per cent, RBI pegs it at 8.5 per cent

13 September 2007

Mumbai: The Centre for Monitoring Indian Economy (CMIE) has revised its estimate of the country''s GDP growth to 9.1 per cent in fiscal 2007-08, marginally up from its earlier estimate of 9.0 per cent.

CMIE , the independent think tank, based the revision on a robust growth in services and industry.

CMIE expects Indian industry to grow at 9.5 per cent and the services sector to grow at an even higher 10.7 per cent, in the fiscal year ending March 2008. It has also revised its farm output growth estimate to 3.9 per cent, from 3.1 per cent earlier.

"While fresh investments continue to flow in, slowdown in the production growth of consumer durables and decline in personal loan disbursement by banks raise questions over the sustainability of the consumer expenditure growth in future," CMIE said in its latest review.

India''s economy grew at 9.3 per cent in the June quarter, but analysts expect the pace to moderate later in the year.

CMIE expects inflation to moderate due to a higher base effect. "We expect inflation in the WPI (wholesale price index) to reduce a tad to close to 3.5 per cent in the coming months because of a higher base," it said.