Economic Growth to Slow Below 7.5 percent in 2008/09
Dec. 11- As the ADB and World bank dropped their estimates of Asia's GDP growth for 2009 to 5.8 percent and 5.3 percent respectively, India's central bank also said its 2008/09 GDP growth estimate of 7.5-8 percent would be lowered. The Indian economy posted a growth of 7.8 percent in the first half of the current fiscal down from 9.3 percent during the same time a year ago.
In a bid to boost the economy, the government slashed key interest rates by 1 percentage point last Saturday and announced an additional US$4billion spending package for battered sectors such as auto, manufacturing and real estate.
Passing on the benefit to buyers, can manufacturers dropped prices by 4 percent. However, the sector which had been bleeding for sometime now has crashed to an eight year low. According to car sales figures released by the industry, sales dropped 19 percent to 83,059 units against 103,000 units in the same month last year. The year-on-year percentage drop was the biggest in the last five years since a 31 percent fall in February 2003. The manufactring industry has also taken a hit with the sector expected to fall 10-30 percent over the next four months.
Speaking to Reuters the central bank chief Duvvuri Subbarao said though the central bank and the government had taken steps to shield the economy from the effects of the global crisis, there would be a period of painful adjustment.
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