May 29, 2008 (AFP) – A slowdown looms for India’s economy amid global financial turmoil even though it may post better-than-expected growth for last year in official data due on Friday, economists say. Just as positive global factors supported India’s expansion earlier, “negative global factors,” such as surging commodity prices and growing investor risk aversion, were “now threatening to pull its growth below potential,” said Morgan Stanley economist Chetan Ahya.
India’s trillion-dollar economy is estimated to have grown by 8.7 percent for the fiscal year to March 31, 2007, according to the government. But the figure to be released Friday could be higher since the farm sector may turn in an healthier-than-expected performance, economists say.
“There is a good chance this figure will be revised up,” said Rajeev Malik, an economist at JP Morgan.
That expansion, however, is down from 9.6 percent growth the previous year.
Meanwhile, growth this financial year is showing signs of sputtering still further with most private analysts forecasting the economy will expand by between seven and eight percent.
That’s still turbo-charged by anaemic Western standards, but the figure is well s