According to a recent press report, Global banking giant Goldman Sachs has alleged that Indian economy is going to face the downside risk which ensures that Reserve Bank has to lower its projection growth rate from 8 per cent to 7.6 per cent for this fiscal.
Goldman Sachs from the Global ECS Asia Research in ‘Asia Policy Watch’ has also said that Gross Domestic product (GDP) for FY12 is estimated to be 7 per cent with downside risks but also RBI may need to revise its growth rate further. It also added that the global progression decline will have an undesirable impact on domestic growth, intensely on industrial production.
GDP rate in 2010-2011 was expanded by 8.5 percent. During the period of April-June of this fiscal, growth rate had fallen off into 7.7 per cent. RBI had said that if a reliable solution is not found for euro debt problem, then it will weaken the entire economic growth.
RBI has said that inflation as well as slowdown in project investment is also impacting growth. Inflation rate in March 2012 will be 6 per cent which is below the RBI projection of 7 per cent. RBI has hiked the interest rate 13 times to curb the inflation. Goldman said that RBI may cut interest rates in April 2012.
The RBI’s rate hike has made the new and also some of the existing home loans and other loan borrowers anxious about the chance of loans becoming dearer.