Goldman Sach, BoAML and SCB cut India growth rates

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, May 25, 2012, 14:34 [IST]

Three noted foreign investors have cut India's growth forecasts by revising downwards growth estimates. Standard Chartered has said that it expects India to report an annual growth rate of 6% in the March quarter from 6.1% in the previous quarter and below earlier expectations of an improvement to 6.5% or 7%.

According to a Reuters report Goldman Sachs said it was cutting its gross domestic product forecast to 6.6 percent from 7.2 percent for the fiscal year ending in March 2013, citing a weaker investment outlook on the back of domestic policy uncertainties.

The news agency also pointed out that Bank of America Merrill Lynch also downgraded its views, to 6.5 percent from 6.8 percent previously for fiscal 2012-13, though it cited the fallout from the euro zone crisis as its main rationale.

It maybe recalled that earlier Morgan Stanley had cuts its growth forecast. Foreign institutions are now increasingly getting bearish on India as fundamentals of the economy start weakening.

High inflation, high current account deficit and high fiscal deficits are playing havoc with the rupee. The Indian currency is amongst the worst performing currencies this year. Government inaction over reforms and policy paralysis are other reasons why institutions are bearish on India.
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