Growth will slide to 7.6% in ’08: Unctad

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New Delhi, Sep 4 : Reflecting the trend of a global slowdown due to tight monetary policies after the US sub-prime crisis and rising commodity prices, the country’s economy would also fall to 7.6% in calender 2008 from 9.7% in calender 2007, according to the latest ‘Trade and Development Report’ of United Nations Conference on Trade and Development (Unctad).

The report says the world output growth will slip to 2.9% in 2008 from the preliminary estimate of 3.8% in 2007, while China’s growth would also fall to 10% in 2008 from 11.4% in 2007. The growth of US would fall from 2.2% in 2007 to 1.4% in 2008, growth of Japan would also decline to 1.4% in 2008 from 2.1% in 2007, it said. The forecast for Russia’s growth also is down to 7.5% in 2008 from 8.1% in 2007 and that of Brazil is 4.8% in 2008, down from 5.4% in 2007.

Interestingly, the report also highlighted that public sector banks % in total bank assets in India has fallen from 83.8% in 1994-95 to 76.9% in 2000-01 and further to 69.2% in 2006-07, while the share of private domestic banks have steadily gone up from 8.9% to 15.7% and to 23.4% during the same period. The report says the similar share of foreign banks have remained constant at 7.3% in 1994-95 and 7.4% in both 2000-01 and 2006-07.

The Prime Minister’s Economic Advisory Council had last month said that the country’s economy would grow only by 7.7% in fiscal 2008-09, much lower than the 9% growth in 2007-08. The Reserve Bank of India had pegged the growth for 2008-09 at 8%, while the chief economic advisor projected it between 7.75% and 8.75%.

The country’s GDP had fallen to 7.9% in April-June 2008 as against 9.2% in the corresponding period last year. This quarter’s growth was the slowest in any quarter in the past over three years.

“In mid-2008 the global economy is teetering on the brink of recession. The downturn after four years of relatively fast growth is due to a number of factors - fallout from the financial crisis in the US, the bursting of housing bubbles in other large economies, soaring commodity prices, increasingly restrictive monetary policies in a number of countries and stock market volatility,” the Unctad Trade and Development Report 2008 said.