The Centre for Monitoring Indian Economy (CMIE) has lowered its growth forecast to 6 per cent, from 6.2 per cent projected earlier, for this fiscal, owing to the delay in recovery in industrial sector and the fall in mining, manufacturing and construction segments.
“We have reduced our GDP forecast to 6 per cent,” CMIE said in its report on the domestic economy on Friday.
The real GDP growth in the second quarter will be the same as in Q1, 5.5 per cent, while the third quarter is expected to show some improvement at 5.9 per cent.
“The recovery is thus pushed forward closer to the end of the year. We expect the last quarter to post a 7 per cent growth. As a result of this delay in the recovery, the overall growth is expected to decline to 6 per cent,” the report said.
The downward revision comes weeks after government pegged the GDP growth at 5.5-6 per cent. The economic growth fell to a nine-year low of 6.5 per cent last fiscal and in the first quarter of the current fiscal, it expanded by only 5.5 per cent.
CMIE had projected a 7.7 per cent GDP growth for the current fiscal in February based on expectations of a normal monsoon and a revival in the industrial sector predicated on the mining sector’s bottlenecks being removed.
The International Monetary Fund last month slashed its 2012 economic growth forecast to 4.9 per cent from 6.1 per cent.
The CMIE said although every major forecasting agency had reduced the forecast for GDP in FY13, the perception that the prospects have improved has not diluted.
The CMIE has also revised downward its estimate for agriculture production to 1.3 per cent from 1.6 per cent earlier, with mining and quarrying sector growth slipping to 2 per cent from the earlier forecast of 2.6 per cent.
Similarly, the manufacturing sector growth has also been pegged down to 2.8 per cent from 3 per cent.
“We have also revised our forecast for the construction sector sharply to 5.7 per cent as against earlier projection of 7.2 percent,” CMIE said.