Morgan Stanley sees india GDP growth at 5.8%

Global investment bank Morgan Stanley on Wednesday slashed its projection for India’s GDP growth rate to 5.8% for the current fiscal from 6.3% earlier, blaming a misguided policy approach and “bad growth mix.” HT reports.

Global investment bank Morgan Stanley on Wednesday slashed its projection for India’s GDP growth rate to 5.8% for the current fiscal from 6.3% earlier, blaming a misguided policy approach and “bad growth mix.” It also saw the Reserve Bank of India lowering interest rates by one percentage point more by March 2013.

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The bank said India’s yawning fiscal deficit and high interest rates have led to a fall in private investments, and the situation is “not sustainable.”

It said the high growth between 2003 and 2007, when GDP grew at 9% a year, was driven by private investment, unlike the present consumption-led growth.

According to the official data released last week India' growth rate for the fourth quarter in 2011-12 stood at 5.3%, the lowest in nine years while it was 6.5% for the full fiscal.

Besides Morgan Stanley, several other global banks such as Goldman Sachs, StanChart, HSBC, Citi, have also slashed growth projections for India.