Shocker: India's economic growth rate for 2012-13 to plunge to 5%, says govt

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India's 2012-13 GDP growth estimated at 5.0%. (Reuters) India's 2012-13 GDP growth estimated at 5.0%. (Reuters)
SummaryEstimate is the worst of all growth projections issued by the govt and the RBI.

driver that is lowering GDP numbers and whether rate cuts can prevent that."

A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP LTD, MUMBAI

"The estimate seems to be on the lower side. It is surprising that construction sector is estimated to slow sharply in the second half. There is some concern that the drastic slowdown in government spending could affect October-March GDP data.

Even then, I expect this advance estimate to be revised upwards. I think we will end up closer to RBI's estimate of 5.5 percent."

DARIUSZ KOWALCZYK, SENIOR ANALYST, CREDIT AGRICOLE, HONG KONG

"India says FY13 GDP may rise 5 percent, well below the 5.5 percent consensus - this is negative for INR and overall sentiment in India. It may well push the INR OIS and bond yield curves down. Yesterday we closed our long INR position at a 4 percent profit and are waiting for some weakening before re-entering."

RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI

"5 percent GDP growth for the full year is more in tune with reality. The industrial sector downturn has extended beyond anyone's expectation. In the first eight months of the year, for almost six months the manufacturing output has been negative.

Exports have been continuously declining, non-food credit growth is slowing while agricultural sector performance has also been sub-optimal.

After the government started showing a firm resolve to put things in place in mid-September, the series of data that has been released is also reflecting sustained deterioration across various growth indicators."

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