NCEAR upgrades GDP forecast to 8.44%

Posted: Thursday, Jan 18, 2007 at 0000 hrs IST
Updated: Thursday, Jan 18, 2007 at 0000 hrs IST

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New Delhi, Jan 17: Riding on the bouyant industry and services sectors, the economy is expected to carry on its current growth momentum, according to economic think-tank National Council of Applied Economic Research (NCAER). In its Quarterly Review, the agency upgraded its projections for gross domestic product (GDP) growth to 8.44 % for 2006-07. It had earlier projected 8.13% growth in October, 2006.

However, on account of a fall in the crude oil prices and bouyant tax revenues, NCAER kept its forecast for average wholesale price index-based (WPI) inflation unchanged at 4.98 % for FY07.

NCAER’s projected GDP was still lower than the current trend of 9% in Q2 of this fiscal, but higher than the October estimates. The review projected lower fiscal deficit at 3.63% of GDP against the earlier forecast of 3.71% and a dip in current account deficit to 1.93% of GDP against 2.11% assessed in October.

The think-tank projected higher growth in industry and services sectors by 0.53% and 0.29%, respectively to 9.13% and 10.24%.

However, growth projection for the agriculture sector has been retained at 2.65% for FY07as the sector has had to contend with an erratic and uneven rainfall across regions in the current monsoon period.While manufacturing sector grew 11.6% in April-Nov over the same period in the previous year,cement and steel turned out to be laggard during the period.

In services sector, telecom, transport and financial sectors are likely to remain sources of growth over the medium term, especially if they reach out to the rural areas which are presently under-served, it said.

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