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India to see above 6pct economic growth – Nomura

India is expected to see a real GDP growth of 6.9% in September quarter while the 'downside risk' for the economy has increased amid prolonged turbulence in the global financial markets.

Global financial services group Nomura has said that "We expect real GDP growth to remain below potential and inflation to moderate as tight monetary policy and weaker global growth cap demand.”

It added that the real GDP expansion is projected to slowdown to 6.9% in the September quarter on a year on year basis from 7.7% growth clocked in three months ended June.

According to Nomura, the lower growth would be on account of broad based slowdown in private consumption, fixed investment and exports.

The report noted that "Although we expect GDP growth to rise in 2012, the downside risk to the economy has risen, mainly due to prolonged turbulence in global financial markets.”

Regarding price rise, the report said that headline WPI (Wholesale Price Index) is expected to remain over 9% this month and moderate to about 8% in December.

Nomura said that "Our view is that the RBI (Reserve Bank of India) will stay on hold as we also expect inflationary pressures to wane and growth slowdown to broaden in coming months.”

RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation.

The report noted that "On the fiscal front, rising subsidies and lower revenues should result in a higher fiscal deficit of 5.5% of GDP in FY 12 versus a budget estimate of 4.6%.”