MUMBAI, Sept 10, 2006 (AFP) – Patchy monsoon rains in India this summer have led analysts to downgrade forecasts for farm growth, but full-year projections for gross domestic product remain stable as manufacturing and services boom. Several major forecasts, including the New Delhi-based National Council of Applied Economic Research, expect growth of eight percent in the fiscal year ended March 2007, in line with estimates by the government and central bank.
But many banks and brokerages expressed concern that disappointing monsoon rains, which end in September, will make it hard for farmers to contribute or benefit from the booming economy.
“We’re betting on positives through manufacturing sector growth,” says India strategist for JP Morgan Siddarth Mathur.
He has kept a growth forecast of 7.5 to 8.0 percent this year.
But he said a farm growth forecast of 2.5 percent could be revised down because of the patchy monsoon which impacts almost two-thirds of India’s 1.1 billion people and is crucial for lifting rural spending on consumer goods.
“The economic data shows strong growth going ahead. We will re-assess agricultural growth only after the monsoon season ends,” he said.
India’s annual southwest monsoon whic