Rochester,NY 9/2/2009 10:09:32 PM
Morgan Stanley MS, cuts growth forecast
Morgan Stanley
Morgan Stanley said it had cut India's economic growth forecast to 5.8 per cent in 2009/10 from its earlier projection of 6.4 per cent, in anticipation of a drop in agricultural output.
The figure is lower than a government estimate of 6.3 per cent for the current fiscal year that ends in coming March, and a Reserve Bank projection of 6 per cent with an upward bias.
The US bank said weak monsoon rains and drought in some parts of the country would likely see farm output falling 3 per cent in 2009/10, compared with its earlier expectation for 1.5 per cent growth.
However, higher government spending in the hinterlands and a drop in the share of farm produce on rural incomes will offset the impact on industry and services sector growth, analysts Chetan Ahya and Tanvee Gupta said in a note dated September 1.
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