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Revised GDP growth at 8.7% - CMIE

The Centre for Monitoring Indian Economy (CMIE) has said that there will be lower growth in 2008-09. CMIE has revised the real GDP growth forecast for the current fiscal from 9.4 per cent to 8.7 per cent.

According to CMIE, the real economy is largely insulated from the financial turmoil that is currently being seen in the equity markets.

"There is a liquidity crunch in the short term money markets. But, there is no serious credit squeeze for industry, yet. Given sufficient liquidity infusion, growth of the real economy is likely to remain robust," CMIE said.

Commenting on the downward revision of GDP numbers, at a time when the financial markets are in turmoil, CMIE said that its was not entirely because of the turmoil.

"The Indian equity markets fell the most in January 2008. Foreign institutional investors have repatriated $16.2 billion since February. Also, interest rates and inflation have been high for several months now. During this period of capital flight and tight liquidity, the Indian economy did quite well," CMIE said in a statement today.

However, analysing the economic growth for the current fiscal CMIE said that the real GDP grew by an impressive 7.9 per cent in the first quarter of 2008–09 and the exports grew by a robust 35 per cent in dollar terms till August in spite of global gloom.

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