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RBI likely to scale down growth target

The Reserve Bank of India is likely to cut its economic growth target for 2002-03 (April-March) to five per cent from its earlier estimate of 6.0-6.5 per cent, a central bank spokeswoman told Reuters.

She was confirming a report in The Financial Express that the Reserve Bank of India was expected to lower the gross domestic product estimate following poor monsoons.

The spokeswoman told Reuters the central bank would not make the review before October and that the target was likely to be lowered to five per cent.

Many analysts have already lowered GDP growth projections, citing the failure of monsoon rains in the first two months of the season when the country received 24 per cent less rain than normal.

The annual June-September southwest monsoon is crucial for the farm sector which accounts for nearly a quarter of GDP and employs close to 70 per cent of India's billion plus population.

A Reuters survey of eight economists earlier this month put the average forecast for economic growth in 2002-03 at 4.8 per cent with projections ranging from 4.6 to 5.1 per cent.

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