28.11.12

India's GDP may dip to 4.5%


India’s GDP growth could fall to 4.5% in 2012, the Organisation for Economic Cooperation and Development (OECD) said citing euro zone debt crisis as the biggest threat to the world economy even as the member countries of the currency union put out a bailout package for Greece that got a thumbs up from markets.
The forecast for India beats even the 4.9% put out by the International Monetary Fund (IMF) last month. The OECD had pegged India’s growth 1n 2012 at 7.3% in its June 2012 forecast.
In its bi-annual assessment, OECD Economic Outlook, the Paris-based think tank has said the global economic recovery will gain momentum slowly, and lowered the global growth estimate for the current year to 2.9% from 3.4% in its earlier forecast and that of 2013 to 3.4% from 4.2%.
The OECD called for ‘decisive policy action’ ‘to ensure that stalemate over fiscal policy in the United States and continuing euro area instability do not plunge the world back into recession’ listing excessive fiscal tightening in the US as the second biggest risk to the global economy. “The world economy is far from being out of the woods,” OECD Secretary-General Angel Gurría said during the launch of the report in Paris and raised the concerns that the US ‘fiscal cliff ’, if it materialises, could tip the world’s biggest economy into recession. India will declare its GDP numbers for the July-September quarter on Friday amid concerns that growth could fall to less than 5%. Indian economy grew 5.3% in January-March and 5.5% in April-June quarters.
The OECD expects the recent reforms to yield dividend after a while.

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