CMIE lowers growth rate to 5.8% on poor monsoon

CMIE lowers growth rate to 5.8% on poor monsoon
The Financial Express, July 17, 2009, Page 10

Press Trust of India, Mumbai

Economic think-tank, Centre for Monitoring Indian Economy (CMIE), has lowered India’s real GDP growth figure to 5.8%from the earlier expectation of 6.6%due to failure of the monsoon in June.

“India’s real GDP is expected to grow by 5.8%in FY 10,” CMIE said in its monthly review here. The GDP rate of 5.8%is much lower than its earlier expectation of a 6.6% increase in growth. The revision is entirely because of the failure of the monsoon in June, CMIE said.

While the Union Budget for 2009-10 was expansionary and conducive to growth, the delayed monsoon and the consequent 4.7%decline in agriculture is expected to shave off 0.8 percentage points from the GDP growth rate.

At 5.8%, India is still among the very few countries in the world with a respectable growth rate, it said.

This growth rate remains respectable in spite of two consecutive external shocks within less than ten months of the global liquidity crisis in September and the failure of the monsoon in June.

The growth rate is a reflection of the resilience of the Indian economy and its strong fundamentals before the crisis struck in late 2008, CMIE said.