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India: Did I say 7%? I meant 5.7%. My bad.

Indian government lowers 2013 growth forecast yet again, to 5.7%-5.9% from 7.6%
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Did I say 7 percent? I meant 5.7 percent. India lowers its 2013 growth forecast yet again. (AFP/Getty Images)

India lowered its economic growth forecast for fiscal 2013 to 5.7-5.9 percent from an earlier estimate of 7.6 percent, in an apparent pitch for the central bank to slash interest rates.

The Mid-Year Economic Analysis tabled in Parliament on Monday said it's just possible that growth will nose in at 5.9 percent for the year. But to do so, the economy will need to grow at a clip of 6 percent for the entire second half of the fiscal, according to the Economic Times.

Here and there, the report appeared to be addressed obliquely to the Reserve Bank of India, which has been resisting a cut to interest rates due to a continued high rate of inflation.

"To achieve 5.7-5.9 per cent growth 'both fiscal and monetary policy, however, would need to be supportive to sustain investor confidence,' the paper quoted the report as saying. "'The government will also have to address the concerns relating to structural supply side bottlenecks.'"

Suggesting that inflation will moderate toward the end of the fiscal year, the report said that there are signs that the economy is bottoming out and headed toward faster growth in the second half.

The government expects inflation to drop to as low as 6.8 or 7 percent at the end of March.

Meanwhile, it's sticking to a revised deficit target of 5.3 per cent of GDP, compared with the 5.1 per cent mentioned in the budget.

What do other folks think?

"Standard & Poor's has warned again that India still faced one-in-three chance of downgrade in its sovereign rating to junk grade over the next 24 months citing high fiscal deficit and debt burden, but rival Moody's said the country's growth prospects for 2013 have improved," the Economic Times said.

http://www.globalpost.com/dispatches/globalpost-blogs/india/india-revises-growth-forecast

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