Economists doubt feasibility of 9 pc growth forecast

MUMBAI: Leading economists have expressed doubts about achieving an economic growth rate of 9 per cent plus projected in the Economic Survey today given the many a domestic and international headwind staring at the economy.

Economists at the leading rating and research agencies that PTI spoke with are of the view that achieving the higher projected growth trajectory looks unlikely given the medium terms macroeconomic trends.

Ashwin Parekh of Ernst&Young said the bullish projection looks difficult to achieve considering the current situation, especially the stubbornly high inflation and the evolving geopolitical situation in the Arab world.

"The 9 per cent plus growth projection looks difficult to achieve. The past four months have completely changed the macroeconomic conditions not only for us but for the entire global economy," Parekh said.

Stating that if the oil crisis arising from the Libyan political crisis is contained within the next one month, it may not pose too big a challenge to the domestic economy but if it extends beyond two months, it will definitely pose greater challenge to us.

"But as of now we have no clarity on when the crisis will end," he pointed out.

He said the bullishness about growth might have come from the assumption that the present crisis will be over sooner than anticipated and bring down crude prices to around $ 85 a barrel.

The Economic Survey tabled in Parliament by Finance Minister Pranab Mukherjee today forecast over nine per cent GDP growth in FY12, bettering the 8.6 per cent growth projected for the current fiscal.