CMIE pegs GDP growth at 7 per cent

Mumbai: The Centre for Monitoring Indian Economy (CMIE) has pegged FY12 GDP growth estimate at 7 percent, a notch above the government`s own advance estimate of 6.9 percent, and has said growth numbers will improve next fiscal.

The GDP growth will be the slowest in three years at 7 percent for FY12 while it will be 7.7 percent the next fiscal, CMIE said in its February review of the economy.

The report said the GDP, which expanded by a healthy 7.3 percent in the first half of the fiscal till September 2011, is expected to grow by only 6.8 percent in the second half due to both domestic and global issues.

On the domestic front, the report points out impact of drop in mining sector output because of bans in Karnataka and Goa, fall in production from Reliance Industries KG-D6 basin, and drop in coal supply.

As a result, growth in manufacturing sector is expected to moderate to 4.9 percent, it said, adding exports are also expected to fall in the second half.

The banking and financial services sector growth will moderate to 8.8 percent from 10.4 percent of year ago on account of lower growth in credit offtake and higher cost of deposits, it said.

The finance ministry, which had pegged FY12 growth at 9 percent in the budget, has been forced to revise the estimate repeatedly over the fiscal, and in the data released earlier this month, it estimated GDP growth at 6.9 percent.