World Bank projects India’s growth @ 7%

World Bank expects India's economic growth to moderate to 7 per cent
in 2008 on account of tightening of monetary policy and the resultant
slowdown in demand for industrial goods.

"GDP growth in India eased to a still strong 8.7 per cent in 2007,
from 9.7 per cent in 2006, and is projected to slow further to 7 per
cent in 2008," said the World Bank report on Global Development
Finance released on Tuesday.

World Bank attributed the moderation in GDP to "monetary tightening in
2007 (that) led to softening in domestic demand".

Though the restrictive measures prevented the further fuelling of
inflation, they proved detrimental to exporters by strengthening
rupee, the report said.

There are growing signs of Economy cooling down with deceleration in
industrial production to 3 per cent in April 2008, it added.

However, the report said, despite the slowdown the rate of consumption
has not fallen mainly on account of large remittance flows and healthy
wage growth in the country.

The report also projects slowdown in global GDP from 3.7 per cent in
2007 to 2.7 per cent in 2008.

Source: Financial Express

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