Nomura lowers growth projection for 2012 to 5.5 per cent

NEW DELHI: Attributing economic slowdown in India to monetary and fiscal policy, global financial service provider Nomura has lowered the country's GDP growth projection for 2012 to 5.5 per cent from 6.1 per cent.

It has also lowered the projection for India's economic growth for 2013 to 6.6 per cent from 7.1 per cent.

"Our economics team cut India's GDP growth forecast (to 5.5 per cent from 6.1 per cent for 2012 and 6.6 per cent from 7.1 per cent for 2013) while revising up WPI inflation forecast to 7.6 per cent from 7.1 per cent, citing the deadlock in its monetary and fiscal policy," it said in a report.

Nomura further said that the outlook is "less sanguine" for India.

Earlier, Nomura had sharply lowered India's economic growth forecast for the financial year 2012-13 to 5.8 per cent from its earlier estimate of by 6.7 per cent saying the country's monetary and fiscal policies are at loggerheads.

The government is aiming at GDP growth rate of about 7.6 per cent this fiscal. India's economic growth rate slowed to 6.5 per cent in 2011-12 from 8.4 per cent in the previous two fiscals. The GDP growth rate in the last fiscal fiscal was a nine-year low.

In another report, Nomura said that in India a "stagflation" state may emerge due to weak domestic demand and elevated inflationary expectations.