JPMorgan cuts India growth forecast and sees rate cuts

JPMorgan has cut its forecast for India's economic growth in 2008/09 and 2009/10, it said in a note on Monday, adding that it expects agressive rate cuts by the Reserve Bank to support the growth momentum. 

The Indian economy may grow 6.7 per cent in the year ending March 2009, JPMorgan said, down from its earlier forecast of 7 per cent. The economy may grow 6.2 per cent in 2009/10, down from its previous estimate of 6.8 per cent, the bank said. 

India's economy grew at an annual rate of 9 per cent or more in the past three years, second only to China among the major economies. Last month, the Reserve Bank cut its estimate for FY09 growth to 7.5-8.0 per cent, but analysts expect it to be lower. 

Other global financial groups like Citigroup, Goldman Sachs, Morgan Stanley and Nomura have also lowered their estimates for India's GDP growth over the past one month. 

My readings from ET