Economix

Goldman Sachs has lowered India’s fiscal 2013 GDP growth forecast to 5.7% from 6.6% due to impact of a weak monsoon season on agricultural output, a weaker investment outlook and continuing global uncertainty. It has reduced fiscal 2014 GDP prediction to 7% from 7.8% on account of a tepid recovery in consumption and investment demand due to less monetary easing and continued policy stasis. The investment bank raised fiscal 2013 WPI inflation projection to 7.2% year on year from 6.5% due to significantly higher food prices caused by drought, though it expects core prices to come off further from current levels. It sees RBI cutting rates by 50 bps in 2013.

India’s exports contracted for the second consecutive month in June by 5.45%, year on year to $25 billion on account of growing economic uncertainties in the western markets. Imports fell by a sharp 13.46% to $35.37 billion during the month, compared to $40.8 billion in June 2011, resulting in a narrower trade deficit of $10.3 billion. Commerce secretary S R Rao said exports are declining because the world over there has been a tremendous dip in trade due to global economic slowdown.