The Centre for Monitoring Indian Economy has estimated FY’12 GDP growth at 7% a notch above the government’s own advance estimate of 6.9% and has said it will improve next fiscal.

CMIE in its February review of the economy said that while the GDP growth will be the slowest in three years at 7% for 2011-12, it will be 7.7% in the next fiscal.

The report said the GDP, which expanded by a healthy 7.3% in the first half of the fiscal till September, 2011, is expected to grow by only 6.8% in the second half due to both domestic and global issues.

On the domestic front, the report points out impact of drop in mining sector output because of bans in Karnataka and Goa, fall in production from Reliance Industries KG-D6 basin, and drop in coal supply.

As a result, growth in the manufacturing sector is expected to moderate to 4.9%, it said, adding that exports are also expected to fall in the second half.

It said that the banking and financial services sector growth will moderate to 8.8% from 10.4% of year ago on account of lower growth in credit offtake and higher cost of deposits.

The Finance Ministry, which had pegged FY’12 growth at 9% in the Budget, has been forced to revise the estimate repeatedly over the fiscal, and in the data released earlier this month, it estimated GDP growth at 6.9%

(Sourced from PTI)