Financial firms expect another stimulus, raise GDP projections

NEW DELHI: Leading global financial firms have revised upwards India's economic growth forecast to 6.3 per cent this fiscal, which is better than RBI's projections of 6 per cent, due to possible fiscal stimulus in the Budget and greater-than-expected investment in the country.

Bank of America Securities-Merrill Lynch raised its growth forecast to 6.3 per cent from 5.3 per cent for the current fiscal.

"At the heart of our upgrade is a likely fiscal stimulus of 0.5-1 per cent of GDP in the July Budget," Bank of America Securities-Merrill Lynch (BAS-ML) Research said in a report.

BAS-ML has also revised the country's growth projection to 7.3 per cent for the next fiscal from 7.1 per cent earlier.

It further said that the convincing re-election of the Congress-led UPA has opened the door for about disinvestment in public sector units to the tune of 0.5 per cent of GDP.

Leading global financial firm Nomura also said, "We have revised up our real GDP growth estimate for FY'10 to 6.3 y-o-y from 5.3 per cent, as investment has proven more resilient than we had expected and because financing is likely to become easier in future."