Economists doubt feasibility of 9 pc growth forecast

Written by: Pti
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Mumbai, Feb 25 (PTI) Leading economists have expresseddoubts about achieving GDP growth of nine per cent plusprojected in the Economic Survey today given the many adomestic and international headwind staring at the economy.

The Economic Survey tabled in Parliament by FinanceMinister Pranab Mukherjee today forecast over nine per centGDP growth in FY12, bettering the 8.6 per cent growthprojected for the current fiscal.

Economists at the leading rating and researchagencies that PTI spoke with are of the view that achievingthe higher projected growth trajectory looks unlikely giventhe medium terms macroeconomic trends.

Ashwin Parekh of Ernst&Young said the bullishprojection looks difficult to achieve considering the currentsituation, especially the stubbornly high inflation and theevolving geopolitical situation in the Arab world.

"The 9 plus percent growth projection looks difficultto achieve. The past four months have completely changed themacroeconomic conditions not only for us but for the entireglobal economy," Parekh said.

Stating that if the oil crisis arising from the Libyanpolitical crisis is contained within the next one month, itmay not pose too big a challenge to the domestic economy butif it extends beyond two months, it will definitely posegreater challenge to us.

"But as of now we have no clarity on when the crisiswill end," he pointed out.

He said the bullishness about growth might have comefrom the assumption that the present crisis will be oversooner than anticipated and bring down crude prices to aroundUSD 85 a barrel. (MORE)PTI BEN ABC

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