Indian economy to grow at slowest pace in 10 years

[epicresearch]

India's economy will grow at its slowest pace in a decade this fiscal year, with tight monetary policy, political gridlock and a weakening global economy prompting analysts to slash their forecasts, a Reuters poll showed on Thursday.

Even as growth falters, the rupee has been hitting all-time lows against the dollar, the government is struggling with bloated fiscal and current account deficits and inflation has remained stubbornly high, giving policymakers less room to manoeuvre.

Gross domestic product in India is now expected to grow 6.3% during the fiscal year 2012/2013 and by 7% next fiscal, down from 7.1% and 8%, respectively, expected in the last survey in April.

Growth of 6.3% would be slackest pace of expansion for Asia's third-largest economy since 2002-2003, when it grew 4%.

Growth predictions for India have now been slashed in six consecutive quarterly polls. All of the 17 analysts who contributed to this survey and the last downgraded their growth forecasts for this fiscal year and next.

The International Monetary Fund this week also sharply downgraded growth estimates for India to 6.1% this fiscal year and 6.5% in the next.