NCEAR upgrades GDP forecast to 8.44%

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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.